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 Prime Minister Matteo Renzi's government has already tightened its
initial budget at the Commission's request, but last week an EU
source told Reuters the commission may push Italy to trim it again.
"We expect the budget to be assessed without any requests for
adjustment," Sandro Gozi said on the sidelines of a conference in
Florence, Italy.
The original budget was an expansionary, tax-cutting package which
Renzi said was needed to resuscitate a recession-bound economy which
has shrunk by about 9 percent since 2007.
The dispute with the EU centers on Italy's "structural" deficit,
adjusted for the business cycle. Rome agreed to trim this by 0.3
percentage points, or 4.5 billion euros ($55.75 billion), in an
attempted compromise between the 0.1 percent cut it originally
suggested, and the 0.7 percent Brussels wanted.
Italian Economy Minister Pier Carlo Padoan wrote to European
Commissioner for Economic Affairs Pierre Moscovici and Commission
Vice President Valdis Dombrovskis on Friday to offer more details on
the treasury's plans and defend the budget.
"Any additional correction would further clip the wing of a fragile
recovery," Padoan wrote in a letter published on the website of
Italian newspaper Corriere della Sera.
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The minister said further changes would worsen Italy's "debt
dynamics". Italy has the second-highest public debt in the euro zone
after Greece as a proportion of output.
Padoan underlined in the letter that Italy had agreed to cut its
overall deficit to 2.6 percent of output from 2.9 percent, below the
EU's 3 percent limit which he has pledged to respect.
The Commission is due to announce its assessment of Italy's budget
plans by the end of November. (1 US dollar = 0.8072 euro)
(Reporting by Silvia Ognibene, Writing by Isla Binnie; Editing by
Alison Williams)
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