Italy is moving to introduce a minimum income guarantee amidst surging sovereign debt cost and decelerating growth.
The Sole 24 Ore daily reported on Wednesday that the government is willing to introduce its “citizens’ income” plan in its 2019 budget, which guarantees every Italian citizen €720 a month.
The budget will be presented this autumn and both the European Commission and the European Central Bank have announced they will only deal with “facts,” awaiting the actual draft of the budget.
The plan could have a significant cost as tax revenue will be lower than projected. The government lowered its GDP forecast for 2018 from 1,5% to 1,2%. To do so, the government has made clear that it is willing to break EU fiscal rules, going beyond a 3% deficit.
“Our priority is the citizens and their needs,” said deputy prime minister Luigi Di Maio in an interview with the public broadcaster, RAI tv. The statement echoes a similar view expressed by the other deputy prime minister, Matteo Salvini, who told Corriere della Serra on Sunday that the 3% deficit ceiling set by the EU is “not the Bible.”
The Italian government is seeking to raise € 3.5bn from a tax amnesty program, referred to as “fiscal peace” in a statement issued on Tuesday.
This is prior to another set of measures set to start in January 2019, allowing companies and individuals that have a legal dispute with the government to pay to shelve it.
Last Friday, Italian 10-year bond yields passed the 3% barrier while some economists project that this could reach 3,5% by years’ end, Reuters reports.