Italy’s government is due to decide on targets for the 2019 budget deficit, debt level and growth by midnight Thursday, but negotiations have been hit by a last-minute demand for extra spending by the coalition’s two deputy prime ministers.
League leader Matteo Salvini has decided to support a push by Luigi Di Maio of the Five Star Movement for a budget deficit of 2.4 percent next year, according to a party official. Finance Minister Giovanni Tria is fighting to keep the shortfall to 2 percent.
Italian bonds and stocks declined and the euro weakened as the frictions among political leaders reawakened investor concern. The spread between Italy and Germany’s 10-year bonds widened as much as 16 basis points to 250.
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Dean Popplewell
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