Italy's leadership has found 23 billion euros ($25 billion) for a financial scheme that would allow the government to avoid an increase of the value-added tax (VAT) next year, Prime Minister Giuseppe Conte said on Monday.
"The first good news is that we are sterilizing the VAT increase. We have found the 23 billion euros. There is still a little more to find, but we are ambitious," Conte said, as quoted by the ANSA news agency.
Earlier on Monday, ANSA reported, citing sources, that the Italian parties that support the coalition government had failed to reach an agreement on the VAT increase during a four-hour meeting overnight, with the Five Star Movement (M5S), led by Foreign Minister Luigi Di Maio, and the Italia Viva (IV) party, led by former Prime Minister Matteo Renzi, strongly opposing any increase, even a partial one.
In 2018, Italy's public debt-to-GDP ratio was 132.2 percent — the second-largest ratio in the European Union and one of the world's largest. According to the European Commission, such a debt makes the country's economy extremely vulnerable. European Union limits stipulate that a member's budget deficit must not exceed 3 percent of the national GDP and that its public debt must be below 60 percent of its GDP. Brussels has been pressing Rome to make efforts to curb debt and to avoid bloating the budget deficit.