ROME: Italian Prime Minister Matteo Renzi promised sweeping tax and spending cuts to help boost growth and jobs next year, as the European Commission considers whether to reject his budget plan for reducing debt too slowly.
Speaking to a conference of business leaders, Renzi said he would reduce taxes by 18 billion euros ($22.8 billion) in 2015, with 6.5 billion being set aside to slash a widely criticized regional labor tax known as IRAP.
Another 10 billion euros would go to extending an income-tax cut for low earners introduced earlier this year; 1 billion euros for tax breaks to companies that hire new full-time staff; and 500 million euros to help families, Renzi said.
He also announced 16 billion euros in cuts from a spending review in the budget, due to be unveiled on Wednesday just in time to meet an EU deadline, but gave no details.
The premier announced the cuts as the European Union weighs whether to ask Italy, now back in recession for the third time since 2008, to do more to rein in borrowing.
Italy’s public debt is the second highest in the euro zone as a percentage of GDP, and it has risen steadily to record highs above 130 percent of national output.
The budget plans, which include 11 billion euros in additional new borrowing next year, will delay the reduction of this debt pile, potentially setting Rome against the European Commission, which monitors national budget plans.
