Rome, October 18 - Economy Minister Pier Carlo Padoan said Tuesday the government's Draft Budgetary Plan (DBP), just sent to Brussels, showed that Italy was in line with the European Union's budget rules. The budget numbers Italy has presented to Brussels "will have to be assessed but in our view we are in line" because the deficit will keep falling, Padoan said Tuesday. The 2017 budget deficit will be 2.3% and not 2.0% as initially forecast, the DBP said. The extra decimals of "flexibility" are needed to meet the costs of the migrant emergency and earthquake reconstruction, Italy says. According to EU rules in the Stability and Growth Pact, the budget deficit should be no more than 3% of GDP. But the Pact also says countries must keep cutting the deficit with the aim of balancing the budget. Padoan said the relationship with the European Commission was "very positive, continuous". The 2017 budget "isn't an electoral advertisement, it's good for the country's growth," Padoan said. He said the budget was following "the path of the government's strategy since its inception: we'll cut taxes". Padoan was answering opposition claims the budget contains a series of hand-outs and other crowd-pleasing moves like the scrapping of tax-collection agency Equitalia, allegedly to curry favour and get people to vote for a Constitutional reform overhauling Italy's political machinery in a December 4 referendum. Padoan said the scrapping of Equitalia's files and a new voluntary disclosure programme on cash "are absolutely not a tax amnesty" because "people pay what is due". In order to make unpaid taxes on cash transactions surface, he said, "the voluntary disclosure proposes a mechanism with which the owners of this hidden wealth are invited to let it emerge". Adjustments to ministerial spending will produce 2.8 billion euros or 0.17% of GDP next year according to the DBP. Spending cuts and "re-programming" will produce the money, the DBP said. The DBP also said 1.8 billion euros would be obtained by an auction of broadcast frequencies. The DBP confirmed Italy would balance the budget in structural terms in 2019.
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