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Italy parliament approves government’s 2020 budget in confidence vote

ROME (Reuters) – Italy’s 2020 budget was passed by parliament on Monday, around a week ahead of the end-year deadline, thanks to a confidence vote in the Chamber of Deputies.

The budget, which targets the fiscal deficit to remain at 2.2% of gross domestic product in 2020 for a third consecutive year, had already been approved in the upper house Senate and so now becomes law.

The government won the Chamber of Deputies vote by 334 to 232.

Confidence votes are often used by governments in Italy to accelerate the passage of legislation by truncating debate and voting on amendments. If the government loses a confidence vote it is obliged to resign.

The coalition of the anti-establishment 5-Star Movement and the center-left Democratic Party, which took office in September, said the budget’s main goal was to cancel a hike in sales tax worth 23 billion euros ($25.35 billion) that was due to kick in from January.

The ruling parties managed to find resources to head off the increase, but to reach their multi-year deficit targets they have penciled in fresh value added tax hikes worth 20.1 billion euros in 2021 and 27.1 billion in 2022.

During the budget’s passage through parliament the coalition reduced the scale of several new taxes contained in the original bill presented in October, while finding alternative funding to maintain the 2.2% 2020 deficit target.

(Reporting by Gavin Jones)

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