Italy wins senate approval for new budget

Romes upper house voted to approve the budget deal agreed with the EU Sunday morning, ahead of the year-end deadline for final approval by parliament.

Under the deal agreed with the European Commission on Wednesday, Italys populist coalition dialed back its spending plans to avoid disciplinary action from Brussels, lowering its 2019 deficit target from 2.4 percent to 2.04 percent.

The Italian senate voted in favor of the deal by 168 votes to 63, news agency ANSA reported, meaning it will now move to the lower house.

The Commission had previously been considering whether to open an “excessive deficit procedure” against Italy, given its “serious non-compliance” with the blocs budget and debt rules. The countrys public debt is about 131 percent of GDP.

The EUs decision to back down from the fight has drawn concerns it could undermine Brussels authority to enforce fiscal targets.

Jens Weidmann, Germanys top banker, on Saturday expressed worries about “what this means for future budgetary discipline in the euro area,” in an interview with the Welt am Sonntag newspaper.

“The original promise to cut the deficit has been compromised,” said Weidmann, president of the Bundesbank. “It makes it difficult for the Commission and other governments to push for sound state finances in the future.”

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