Mandatory Credit: Photo by GIUSEPPE LAMI/EPA-EFE/REX/Shutterstock (9887919a) Italian Economy Minister Giovanni Tria reacts during a question time at the Upper House, Rome, Italy, 20 September 2018. Milleproroghe decree passed into law, Roma, Italy - 20 Sep 2018
Giovanni Tria has steadfastly stuck to keeping Italy’s budget deficit at around 1.6% of GDP

Italy’s technocratic finance minister Giovanni Tria is coming under renewed pressure to increase the country’s budget deficit to accommodate the expensive election promises of Rome’s populist coalition government.

This Thursday Mr Tria will present formal targets for the country’s borrowing and growth in an announcement that will be closely scrutinised by Brussels and financial markets.

In the run-up to the statement, politicians from the ruling League and Five Star parties have urged Mr Tria to make fiscal room for a string of costly policies.

However the technocrat — who has affiliations to neither of the ruling parties — has steadfastly stuck to keeping Italy’s budget deficit as a percentage of gross domestic product at around 1.6 per cent. He does acknowledge that the government’s programme — which includes calls for tax cuts from the League and a universal basic income from Five Star — will be implemented over time.

The behind-the-scenes pressure confronting Mr Tria and his staff at the Ministry of Economy was illustrated by a leaked recording of the Italian prime minister’s spokesman, a senior Five Star figure, warning that he would hunt down recalcitrant bureaucrats in a “mega vendetta” if they blocked spending plans.

“If in the end they say to us ‘We couldn’t find the money’ then we’ll devote the whole of 2019 to getting rid of all these pieces of shit [at the finance ministry],” said Rocco Casalino, chief spokesman for Guiseppe Conte, in an off-the-record recording leaked to Italian media.

Mr Casalino, a former contestant on the Italian version of Big Brother who later became the head of communications for the Five Star Movement, released a statement saying the leaked comments represented a breach of his privacy and that he had no intention of following through with the threats he made. Mr Conte said he retained full confidence in his spokesman.

Italy's government spokesman Rocco Casalino looks on on June 11, 2018 at the Chigi palace in Rome. (Photo by Alberto PIZZOLI / AFP) (Photo credit should read ALBERTO PIZZOLI/AFP/Getty Images)
Italy's government spokesman Rocco Casalino has added to the pressure on finance minister Giovanni Tria © AFP

The Italian government has to set its borrowing and growth targets this week and provide a draft budget to the European Commission by the middle of October. Italy has the second largest public debt-to-GDP ratio in the eurozone, making its public finances acutely sensitive to any increase in its borrowing costs triggered by financial markets losing confidence in Rome’s ability to grow and cut debt.

Mr Tria has publicly retained the support of Matteo Salvini, leader of the hard-right League, and Luigi Di Maio, leader of the anti-establishment Five Star.

Mr Salvini said a meeting about the budget at the end of last week “was useful and positive”. Mr Di Maio last week denied he had pushed for Mr Tria’s resignation, and appeared to make a symbolic compromise with the League’s anti-migration stance by conceding the “citizenship wage” policy his party wants will only be available to Italian citizens, “given the flows of illegal migration”.

On Sunday Mr Conte, a law professor who was virtually unknown before being installed as a figurehead prime minister when Mr Salvini and Mr Di Maio formed their coalition, said Mr Tria retained his confidence. “I trust all ministers,” he said.

Mr Conte said the forthcoming budget “should not be miraculous, but useful for the country, courageous, serious, rational and well constructed”.

Silvio Berlusconi, the former Italian prime minister and media magnate whose Forza Italia party has fallen significantly behind Mr Salvini’s League as the reference point for the Italian right, launched an attack on Five Star on Sunday, declaring its rule was “proving to be worse than we imagined”.

“The response of [Di Maio] is characteristic of their amateurism: ask the treasury for more money, and when faced with the resistance of Minister Tria, who does not want to wreck the public accounts, threaten to throw him out,” said Mr Berlusconi.

“They treat the Ministry of Economy as a cash machine from which to take the money they need to finance their electoral promises.”

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