(Bloomberg) -- Prime Minister Giorgia Meloni’s government was told by Italy’s finance minister that its budget plans mustn’t deviate from any pledges to Brussels to fix the public finances.
In a cabinet meeting on Friday, Giancarlo Giorgetti set out the process that the country needs to follow to conform to newly revamped fiscal rules to bring its deficit down to the European Union’s 3% ceiling, according to a finance ministry official.
Italy, along with France and other members, were reprimanded by Brussels in June for running large shortfalls last year — the first stage in a process that will test nations’ willingness to comply, and the bloc’s resolve to enforce that regime.
Giorgetti has until Sept. 20 to submit plans to the EU explaining how the government will tame its deficit with a view to reducing the second-highest debt pile in the region. The budget for 2025 must then be finished by the middle of October.
Before the cabinet, coalition leaders met in their first gathering since the summer break and pledged to stay together until the end of the current parliament — a key priority for Meloni, who has sought to break with Italy’s past of unstable governments.
“The unity of the coalition was reiterated, and their determination to forge ahead with their reform plan, and the program voted for by citizens, for the duration of the legislature,” the alliance said in a joint statement.
The cabinet meeting didn’t square the circle of how to reconcile giveaway pledges to voters with the need to bring the deficit in line — a showdown that will have to take place in the coming weeks.
For now, the coalition insists it won’t renege on its promises, and in its statement it pledged that the budget will be “balanced.” Meloni, in remarks to the cabinet, reiterated that a legacy of costly measures that the government inherited won’t be repeated.
“It will be a budget inspired by common sense and seriousness, like the previous ones,” she said. “The era of money thrown out the window and bonuses is over, and won’t return while we’re in power. All available resources must in my view continue to be concentrated in support to companies that hire and create jobs to increase the purchasing power of families, with special attention to families with children.”
Separately, the government agreed to nominate EU Affairs Minister Raffaele Fitto for the European Commission.
(Updates with Meloni in penultimate paragraph)
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