Prime Minister Romano Prodi said on Friday he had not discussed with the economy minister diluting belt-tightening measures in the 2007 budget over two years, as unions and some allies have suggested.
"We spoke a lot," Prodi said of his morning telephone call with Economy Minister Tommaso Padoa-Schioppa when asked by reporters to comment on a newspaper report that the minister was considering giving in to "pressure from the left". "We will work in the coming days on these issues but we have not even minimally touched the problem of the expansion over more years," Prodi said.
Padoa-Schioppa is under pressure to take advantage of an economic pick-up in Italy to relax 20 billion euros ($25.55 billion) of planned spending cuts in the 2007 budget, which is due to be presented next month. Politicians in Italy's centre-left ruling majority say Italy has extra breathing room thanks to an unexpected surge in tax revenues this year largely owing to the upturn.