(Bloomberg) -- Italy’s populist government won a key parliamentary vote, pushing its budget a step closer to final approval as a long tussle with the European Union persist.
The Parliament’s lower house backed the government by 330 in favor and 219 against in a confidence vote on next year’s budget bill. Confidence votes are often used in Italy to ensure legislation is approved without lengthy parliamentary debates.
The budget will now go to the Senate, where it is likely to be amended, and then back to the lower house for final approval. The process is due to be completed before the end of the year. The Five Star - League government has been embroiled in lengthy spat with the European Union over its proposed deficit target for next year of 2.4 percent which was rejected by the Brussels-based Commission.
Prime Minister Giuseppe Conte, who has been striving to take a more conciliatory approach with Brussels, is expected to present a revised budget draft to the EU next week. Italian media reports say the 2019 deficit target may come down to about 2 percent. It’s unclear whether that will be enough to avoid fines from the EU for breaking the bloc’s fiscal rules.
A reduction of the deficit target could force Deputy Premiers Luigi Di Maio and Matteo Salvini to dilute or delay their main election pledges, which include a pension law reform and an income for the poor. The two leaders are not willing to cede too much as they are keen to deliver on promises to voters ahead of next May’s European Parliament elections, which they are portraying as a contest between national sovereignty and an interventionist EU.
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