Italy’s Meloni wins lower house backing for borrowing after vote slip up

Italy’s government on Friday won the backing of the lower house Chamber of deputies for additional borrowing, after a first attempt resulted in a major setback for nationalist Prime Minister Giorgia Meloni.

The government’s request to marginally raise this year’s budget deficit to 4.5% of gross domestic product (GDP) from 4.4% under current trends was eventually approved by 221 votes to 116.

In a surprising defeat on Thursday, the right-wing coalition had failed to secure the 201 votes needed to approve the extra borrowing, with almost 50 of its deputies missing, according to politicians.

The result was a shock for the right-wing bloc, in power since October. A senior coalition lawmaker, who asked not to be identified, told Reuters it provided evidence of weaknesses within the alliance in parliament.

Meloni needs both houses of parliament to approve the scheme in the next few hours, as she aims to use the budget leeway to fund costly tax cuts for middle- and low-income workers to be unveiled on May 1, International Workers’ Day.

“We have our responsibilities, we take our faults and we will learn from our mistakes,” Maurizio Lupi, the leader of a small centrist party within the coalition, told the house ahead of the vote.

Tommaso Foti, the lower-house leader of Meloni’s Brothers of Italy party, dismissed speculation there was a political problem and said the defeat was the result of careless behaviour by lawmakers who did not show up at the vote.

The upper house, the Senate, is expected to give its blessing later in the day, barring last-minute surprises.

The extra borrowing is worth 3.4 billion euros ($3.7 billion). It will go to reducing this year’s so-called tax wedge, the difference between the salary an employer pays and what a worker takes home, with the benefit going to employees with an annual income of 35,000 euros and lower.

($1 = 0.9106 euros)