Italy’s populist government maintained its controversial 2.4 per cent budget deficit in responding to EU demands for changes, but made tweaks during a late-night cabinet meeting Tuesday, including adding plans to sell off some government real estate.
Deputy Prime Minister Luigi Di Maio told reporters in Rome that the government was not changing the ambitious social spending plans in its draft budget because "it is our conviction that this manoeuvre is what the country needs to relaunch".
The government has insisted that the spending is necessary to promote growth after years of austerity.
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A letter to Brussels being prepared by Economy Minister Giovanni Tria would outline plans to raise cash through the sale of secondary real estate, which Mr Di Maio said would have an impact on Italy's stubbornly high public debt. He didn't specify what would be sold, but said it would not include "the family jewels".
Mr Di Maio also suggested there would not be a safeguard clause that would trigger spending cuts in the event that the deficit target was overshot, as Italian media had reported. He said the government was committed to staying within the 2.4 per cent of GDP deficit target.
“We won’t play sly foxes with the deficit,” he said. “But at the same time we will maintain commitments to Italians made in the government contract. There will be all the cuts of waste, cuts of useless military spending and there are the social measures to give back social rights to Italians.”
European officials have staunchly opposed the 2.4 per cent deficit, which is more than three times the target of the previous government, and at a level that would keep Italy from reducing its debt load as it had promised.
Italy's debt is currently about 130 per cent of GDP, far above the EU limit of 60 per cent and the second highest in Europe after Greece. The big concern is that doubts about Italy's debt could rekindle financial turmoil, as well as questions about the future of the euro.
The EU rejected Italy’s draft budget, saying it broke the rules, and gave the government until midnight Tuesday to submit a new version. The Italian government could face sanctions if it does not comply.
The plan to sell real estate was unlikely to persuade Brussels, especially since the positive impact is not assured. Selling government properties was also a hallmark of the technical government of Mario Monti, which had forecast in 2011 raising as much as €30 billion by 2020 with the sale of government properties.
The stand-off has unsettled investors, who have sold off Italian debt in recent months, pushing up the country’s borrowing rates. That could be dangerous because higher rates can hurt Italy’s public finances, reinforcing investor concerns, in a vicious cycle.
Such a scenario could require the government to make cuts during a moment of economic uncertainty. "This could transform a slowdown into a recession," the International Monetary Fund said in its report, a regular review of the Italian economy released on Tuesday.
It recommends Italy tighten its public finances instead and predicts that the government will miss its own targets, with the deficit hitting an estimated 2.7 per cent next year.
The IMF warned the Italian government that its plan to sharply increase spending carries “substantial” risks and would leave the country vulnerable to market turmoil. It urged Italy “to put to rest any concern about public debt sustainability, which recently has resurfaced”.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
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THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
THE BIO
Age: 33
Favourite quote: “If you’re going through hell, keep going” Winston Churchill
Favourite breed of dog: All of them. I can’t possibly pick a favourite.
Favourite place in the UAE: The Stray Dogs Centre in Umm Al Quwain. It sounds predictable, but it honestly is my favourite place to spend time. Surrounded by hundreds of dogs that love you - what could possibly be better than that?
Favourite colour: All the colours that dogs come in
LA LIGA FIXTURES
Thursday (All UAE kick-off times)
Sevilla v Real Betis (midnight)
Friday
Granada v Real Betis (9.30pm)
Valencia v Levante (midnight)
Saturday
Espanyol v Alaves (4pm)
Celta Vigo v Villarreal (7pm)
Leganes v Real Valladolid (9.30pm)
Mallorca v Barcelona (midnight)
Sunday
Atletic Bilbao v Atletico Madrid (4pm)
Real Madrid v Eibar (9.30pm)
Real Sociedad v Osasuna (midnight)
What is a robo-adviser?
Robo-advisers use an online sign-up process to gauge an investor’s risk tolerance by feeding information such as their age, income, saving goals and investment history into an algorithm, which then assigns them an investment portfolio, ranging from more conservative to higher risk ones.
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Investing in ETFs allows robo-advisers to offer fees far lower than traditional investments, such as actively managed mutual funds bought through a bank or broker. Investors can buy ETFs directly via a brokerage, but with robo-advisers they benefit from investment portfolios matched to their risk tolerance as well as being user friendly.
Many robo-advisers charge what are called wrap fees, meaning there are no additional fees such as subscription or withdrawal fees, success fees or fees for rebalancing.
The biog
Place of birth: Kalba
Family: Mother of eight children and has 10 grandchildren
Favourite traditional dish: Al Harees, a slow cooked porridge-like dish made from boiled cracked or coarsely ground wheat mixed with meat or chicken
Favourite book: My early life by Sheikh Dr Sultan bin Muhammad Al Qasimi, the Ruler of Sharjah
Favourite quote: By Sheikh Zayed, the UAE's Founding Father, “Those who have no past will have no present or future.”
A Bad Moms Christmas
Dir: John Lucas and Scott Moore
Starring: Mila Kunis, Kathryn Hahn, Kristen Bell, Susan Sarandon, Christine Baranski, Cheryl Hines
Two stars
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
