Italian parliament passes 2018 budget, clearing way for elections

ROME - 23 December 2017: Italy's upper house Senate on Saturday gave parliament's final approval to the government's 2018 budget, clearing the way for national elections expected to be held in March.

The financial law, which had already passed in the Chamber of Deputies, aims to lower next year's fiscal deficit to 1.6 percent of gross domestic product from a targeted 2.1 percent this year.

It also introduces a "web tax" from 2019, obliging companies to pay a three percent levy on some Internet transactions.

The Senate passed the package in a vote of confidence by 140 votes to 97. Confidence votes allow the government to speed up legislation by curtailing debate on proposed amendments.

If the government loses such a vote it has to resign, but with elections in any case imminent no parties had any real interest in scuppering the budget and bringing down Prime Minister Paolo Gentiloni's administration.

President Sergio Mattarella is expected to dissolve parliament before the end of the year, after which the government will set the date of the election. Politicians often tout March 4 as the most likely date.

The European Commission says the budget may break EU rules because it raises previously agreed deficit targets and does too little to rein in Italy's huge public debt.

At just over 130 percent of national output, Italy's debt is the highest in the euro zone after that of Greece.

Brussels will issue a final verdict on the budget in the spring, after the Italian election which opinion polls suggest will produce a hung parliament.

The anti-establishment 5-Star Movement leads in the polls, with around 28 percent of the vote, but a centre-right coalition of parties is seen winning most seats in parliament. The ruling Democratic Party has been hit by internal divisions and lags 5-Star by around four points in most polls.