Italy govt infighting could delay meeting on deficit - paper

A crucial government meeting over Italy's new budget deficit target scheduled for Wednesday might be postponed due to disagreements within the ruling coalition over an unrelated policy issue, daily Il Corriere della Sera reported. Unless Rome makes concessions this week on its spending plans for 2019 and 2020, the EU Commission is expected on July 2 to open a disciplinary procedure against Italy for excessive debt.

Economy Minister Giovanni Tria voiced confidence on Tuesday that Rome would reach a deal with Brussels to avoid disciplinary action and confirmed Italy would cut its 2019 deficit target to around 2.1% of gross domestic product from 2.4%. The coalition of the anti-establishment 5 Star Movement and the far-right League party is due to formalise the new target on Wednesday, and also to discuss a deficit goal for 2020.

However, 5 Star and the League are in disagreement over the latter's plan to give greater fiscal autonomy to the rich northern regions, il Corriere della Sera said. The 5-Star, whose voters are mainly rooted in the poor south, refused to support the proposal, the daily said, adding that Wednesday's meeting was likely to be called off.