(MENAFN - Gulf Times) Italian Prime Minister Giuseppe Conte sought to portray his populist government as united in its tussle with the European Union, saying his deputies Matteo Salvini and Luigi Di Maio both agree an infringement procedure on debt must be avoided at all costs.
'The procedure must be avoided as it would damage Italy and Italians, Conte said yesterday during an event in Rome. The alternative would expose the country to 'hard-to-contain market jitters and eventually put Italy in a position of constant scrutiny.
The premier said his government is determined to cut this year's deficit to 2.1% of output, and that Italy will be able to improve the structural deficit by 0.1 percentage points this year.
The remarks followed a late-night summit between the premier — often seen as a mere mediator — and the deputies who've controlled the government since its inception last June, which produced a deal on policies favoured by each side, Conte's office said in a statement in the early hours yesterday.
Salvini and Di Maio have taken issue with the increasingly assertive Conte, Italian media reported, with their policy accord described as a new 'axis aligning the two against the premier and Finance Minister Giovanni Tria, who are seeking to avoid a clash with the European Union.
A week after Conte exhorted the deputies to stop bickering and get down to work, the three agreed that a cabinet meeting later yesterday would review a security decree proposed by Salvini's rightist League party and a minimum wage plan backed by Di Maio's anti-establishment Five Star Movement.
Italy's government appears set for a rerun of the alignment which saw Conte, supported by Tria, manage to persuade Salvini and Di Maio to negotiate with the EU and reach a compromise over the 2019 budget last year.
But in comments yesterday, both deputies were quick to warn that their willingness to work constructively doesn't extend to taking an accommodating stance in negotiations with the EU, a veiled criticism of Conte.
'We are a founder nation of the European Union, we are on a level with Germany and France, Di Maio said yesterday on RTL radio. 'We can demand more respect in Europe.
Di Maio also issued a qualified defence of the proposal to issue so-called mini-bills, or small-value notes that could be used to meet overdue payments to government suppliers.
'The objective is to repay the companies that have credits with the public administration, he said. 'The important thing is to pay companies the money they are due.
While the Five Star leader also said that 'no one will ever set me against Premier Conte, he ruled out budget adjustments as part of the negotiations with Brussels.
'The common objective is avoiding an infraction procedure by guaranteeing growth, the right to work and tax cuts, Salvini said in a statement sent overnight. 'There won't be any budget adjustment or tax increases.
Italy is committed to meeting budget targets and will adopt necessary measures to reach those goals, Tria said at an event in Rome.
'Pursuing stability is an indispensable target for our nation, the finance minister said.