Right-wing leader Matteo Salvini has declared: “Lower taxes or I leave the government”, which has prompted fears this could complicate Prime Minister Giuseppe Conte’s talks with the European Commission over Italy’s growing debt. The country is currently trying to negotiate a budget with Brussels to try to prevent an EU disciplinary procedure, as the European Commission wants Italy to reduce its debt this over the next two years.
But it has opposed tax cuts if they are no new revenues or spending reductions alongside this.
Mr Salvini, who got the backing of the Prime Minister after a recent summit with EU leaders in Brussels, warned “the next budget must not increase VAT”.
He told Italian newspaper Il Fatto Quotidiano: “Lowering taxes is not a right, a possibility or a whim.
“It is not a threat, it is an acknowledgment.
“Who pays the minimum wage? Businesses. And if I do not reduce taxes to those who pay it, I cannot guarantee the minimum wage to anyone.”
Regarding Prime Minister Conte, he says: “He is in Brussels negotiating to avoid the infringement procedure. “That is the goal, but not at any cost”, because the infringement procedure would be “a political and not an economic act”.
“I refuse to think that one of the countries that pays the most to the EU is punished for having respected European rules that are bringing us unemployment, insecurity and debt. I do not even take this hypothesis into consideration.
“If it happens, it would evidently be a political attack based on dislike and not on numbers.”
Mr Conte shared Mr Salvini’s view when speaking during a press conference at the end of the EU summit last week.
He said: ”Salvini’s ideas [on tax cuts] are the same as mine, but I am perhaps more ambitious.”
But Mr Conte did add that while taxes should be lower, everybody should pay them.
He also said he did not think there could be progress in eurozone reforms unless Italy’s interests were properly taken into account.
Leaders have set a December deadline to make progress on the euro zone reform.
Additional reporting by Maria Ortega.