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By Jan Strupczewski
BRUSSELS, Nov 14 (Reuters) – Italy re-submitted its draft budget for next year to the European Commission with the same growth and deficit assumptions as a drafted last month for breaking European Union rules, but with falling debt, the new draft .
EU fiscal rules require highly indebted governments like Italy to cut their structural deficit and debt every year.
The European Commission, which enforces the rules, was considering the option of starting disciplinary steps against Rome.
In the revised budget Italy wants to generate 1 percent of its GDP.
Rome now sees 129.2 percent of GDP in 2019, to 127.3 percent in 2020 and 126.0 percent in 2021 from 130.9 percent. Rome expects this year.
The Commission forecasts Italy's debt at 131.1 percent of GDP this year and does not expect much change to that level until 2020.
Italy stuck to its previous plan to raise its structural deficit, which excludes one-offs and cyclical swings, by 0.8 percent of GDP next year, rather than falling under EU rules.
This still puts Rome on a collision course with the Commission.
Italy kept its growth assumptions for 2019, 2020 and 2021, which the Commission and the IMF see as unrealistically high. The growth rate is 1.5 percent in 2019, 1.6 percent in 2020 and 1.4 percent in 2021.
The European Commission sees 1.2% of the growth in the International Monetary Fund and 1.0 percent next year.
2.4 percent, up from 1.8 percent seen this year, to finance plans of higher spending and tax cuts to deliver on election promises.
The Commission, however, believes that slower-than-forecast growth will be greater than 2.9 percent in 2019 and 3.1 percent in 2020. (Reporting by Jan Strupczewski, editing by Jason Neely)
