Italy's cabinet on Friday adopted a package of measures worth 1.9 billion euros ($2.3 billion) to hold this year's budget deficit within the targeted 4.3 percent of GDP, Economy Minister Giulio Tremonti said.
The package amounts to only around 0.15 percent of gross domestic product. But Tremonti insisted it was enough to rein in the deficit, which recent data showed amounted to 5.1 percent of GDP in the first six months of this year.
"The government is convinced it is possible to meet the 2005 objective of 4.3 percent of GDP as agreed with the European Union," Tremonti told reporters after a cabinet meeting.
The government began 2005 with a deficit-to-GDP target of 2.7 percent, just inside the EU's 3 percent ceiling. This quickly became unrealistic as economic growth stalled and spending curbs set out in the 2005 budget proved ineffective.
The deficit is targeted to fall to 3.8 percent in 2006.
Around a billion euros of the mini-budget is made up of a 30 percent cut to central government spending on goods and services, Tremonti said. Treasury documents later showed 1.15 billion euros were expected from these cuts.
The government's 2006 draft budget currently before parliament pencilled in a further 6 billion euros from civil service spending curbs.
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