EU on BRINK: Italy to STRIKE BACK at Juncker sanctions threat with SAME budget proposal

will present its new budget proposal on Wednesday following a request by the European Commission to rethink some key economic measures non-compliant with European guidelines. 

Brussels demanded that Rome come up with a revised version within three weeks worthy could face fines up to £3billion (€3.4bn).

But Italy has insisted it needs to increase its deficit to 2.4 percent, which breaks EU fiscal rules that are designed to protect the Eurozone.

Italy’s projected GDP for 2019 is expected to be £1.67trillion (€1.87trillion), according to Trading Economics.

If they ignore Brussels and run their deficit of 2.4 percent then their deficit comes to £40.01billion (€44.88billion).

But the eurosceptic Government coalition of Matteo Salvini’s Lega and Luigi Di Maio’s Five Star Movement is proving defiant and has announced it will not change its plans.

The disputed budget includes a new basic income plan and the scrapping of a key Brussels enforced austerity law introduced in 2011. 

In addition, the Government has promised tax cuts for self-employed professionals introducing a so-called Flat Tax of 15 percent for any registered self-employed citizen within a list of limited professions.

The tax cuts are aimed at increasing the personal spending of the country to avoid an increment of VAT proposed by previous Governments.

The Fornero law, a piece of 2011 legislation, named after then-welfare minister Elsa Fornero, has become one of the primary symbols of EU-imposed austerity in Italy.

The aim of the law was to raise cash and reassure markets of the commitment to spending discipline in the eurozone’s third-largest economy.

Italian workers would be moved across to a defined contribution scheme, stopping indexing pensions above a certain income level for inflation and increasing the retirement age to 67.

The Fornero reform was the main element of the ‘Save Italy’ reform package.

After the financial crisis of 2008 and the subsequent Sovereign debt crisis of 2010, Italy was ordered to slash public spending.

However, the drastic cuts were viewed as another EU policy that punished ordinary people for the failings of governments, policymakers, and major US and European banks.

Alberto Bagnai, an economist and senator for Matteo Salvini’s League, insisted his party has no intention of giving in.

But Mr Bagnai scoffed at the potential penalty imposed by Brussels, which would equate to around 0.1 percent of Italy’s economic output.

He told The Sunday Times: “We will give them 0.1 percent of our GDP in 10 cent coins.”