Italy heads for showdown with EU after budget-deficit goal stretches to 2.4%
ROME — Italy’s antiestablishment government has significantly widened its budget-deficit target for next year to fund its electoral promises, a move that will likely put it on collision course with the European Union.
The government, backed by the populist 5 Star Movement and anti-immigrant League parties, targeted a budget deficit of 2.4% of gross domestic product for next year, triple what the previous government had planned.
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The decision caps months of uncertainty over whether the government would maintain its opposition to EU demands that Italy rein in its debt, which Rome sees as limiting the country’s growth potential. The government would prefer to increase spending to spur economic growth.
The two parties had pressed Economy Minister Giovanni Tria, who had advocated a deficit target of 1.6%, to yield to their requests.
An expanded version of this report can be found at WSJ.com
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