Luigi Di Maio insists that there is no clash between the Five Star Movement (MS5) and the Minister of the Economy Giovanni Tria.
No conflict with Tria
The Deputy Prime Minister, Minister of Labour, and MS5 leader Luigi Di Maio denied on Thursday that he is at loggerheads with his Economy Minister over the 2019 budget.
Addressing the press in Perugia, Di Maio said that “there is no rift” with the Minister of the Economy, the public news agency ANSA reports.
“I categorically deny that any threats or ultimatums were put forward,” Di Maio said, denying there is any intention of calling for Tria’s resignation.
Italian media reported on Wednesday that Tria was considering submitting his resignation, following pressure from Di Maio to retain a commitment to a minimum income policy to which MS5 is committed. MS5 came to office on the promise of a €780 minimum income promise for every citizen.
The numbers don’t add up
The policy will cost a minimum of €10bn, according to MS5 projections.
Still, Di Maio insists, the 2019 Budget will retain a minimum citizens’ income guarantee as well as a flat tax provision, as demanded by Matteo Salvini’s League.
Both partners also want to hold off a VAT tax hike that will bring a revenue shortfall of approximately €12,4bn.
Moreover, Di Maio reasserted the MS5 commitment to rolling back 2011 pension reforms, allowing Italians to retire earlier.
On Tuesday, Di Maio made clear that if the 2019 budget did not include a universal income provision, “it will be a problem for the government.
Compromise or confrontation
Cabinet undersecretary Stefano Buffagni told a TV talk show that Tria must “respect the political forces that support him.” This was perceived as a threat.
The incident, followed by a denial that there is pressure on Tria to resigned, triggered a surge in Italian sovereign bond yields.
The numbers don’t add up and Tria suggests that the two parties must accept that government promises can only be gradually implemented over the next five years. Last weekend, the deputy minister of the economy Massimo Bitonci said that the two coalition partners should meet their campaign promises with €5bn each.
Italy is under pressure to reduce its current deficit below a 2% mark amidst decelerating growth. According to Italy’s statistical office (ISTAT), the economy has been decelerating since July making the balance between fiscal consolidation and social transfers harder to maintain.