, FILE - This Wednesday, June 6, 2018 file photo Italian premier Giuseppe Conte, left, and Italian Economy Minister Giovanni Tria talk at the Lower House, ahead of a confidence vote on the government program, in Rome, Wednesday, June 6, 2018. Italy’s economy minister says that the first budget by Italy’s new government will include a basic income scheme sought by one of the main governing parties, the 5-Star Movement. (Riccardo Antimiani/ANSA via AP)
28 of September 2018 07:32:23
ROME (AP) — Italy's stock market has plunged after the new populist government announced a sharp public spending increase that will push the budget deficit to 2.4 percent of gross domestic product next year.
The benchmark FTSE MIB dropped 2.2 percent early Friday, hours after the government announced its first financial targets since taking office three months ago, capping a tense standoff with the technocratic finance minister.
Government partners the 5-Star movement and the League pressed for money to fulfill campaign pledges, namely a basic citizen's income for job seekers and a flat tax, against Finance Minister Giovanni Tria's attempts to keep the budget deficit capped at no more than 2 percent.
The 2019 deficit target is a significant jump from the 2018 target of 1.6 percent, set by the former center-left government.