League Government will prioritize tax cuts over deficit

Italy’s ruling League party main economic spokesman, Claudio Borghi, has made clear that his party wants to pursue an ambitious tax cuts program, even if that means a surging deficit. “We need to pursue a tax cut and it is obvious that a small proportion will be funded with the deficit,” Borghi told RAI public TV on Monday.

The League is leading in the polls, has withdrawn its confidence in the 14-months coalition government, and is calling for snap elections as soon as possible.

The League’s leader, Matteo Salvini, filed a no-confidence motion in Premier Antonio Conte on August 9. The leader of the senior coalition partner, the 5 Star Movement (MS5), accuses

Salvini of wanting to “cash in” on high polling, which is near 38%, just under the 40% threshold that allows a party to form a single-party government. MS5 support has dropped from 33% in March 2018 to 16% now.

President Sergio Mattarella is by definition the arbiter of the government crisis, as the government is unlikely to survive a no-confidence motion. He can now appoint a caretaking government or allow for the formation of a new government by the MS5 and the centre-left opposition Partito Democratico (PD).

While former prime minister Matteo Renzi favours a new coalition that will approve a budget before Italy goes to the polls, PD’s leader Nicola Zingaretti has yet to commit but the left-leaning press suggests that he is not interested, citing sources within his office. The leader of MS5, Luigi Di Maio, is also avoiding any public statement on the subject.

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