on wednesday, economy minister giovanni tria appeared to back the policy.people would be able to retire earlier, to give the country a younger, more skilled workforce. the league promised tax cuts during the campaign. mr tria suggested these could also be on the way, starting with corporation taxes next year and extending to individuals in coming years. so how will all this be paid for? well, the big worry for global markets is italy's debt. relative to the size of the economy, it's the second highest in europe after greece, at just over 130% of gdp. talking to reuters on wednesday, the european central bank's chief economist tried to play down concerns about italy, which some say is a bigger worry for the eu than brexit. are obviously headwinds but i think the risk picture has not fundamentally changed. —— i think there are obviously. we do not see in markets confidence indicators change so far, but it is true that the risks are getting nearer of course. lorenzo codogno is a visiting professor at the london school of economics. he was chief economist at it

as we have mentioned, giovanni tria has a toughjob, we have mentioned, giovanni tria has a tough job,d, giovanni tria has a toughjob, he has to try we have mentioned, giovanni tria has a tough job, he has to try to deliver on those promises, but not break the budget in italy. yes, this is really an interesting case study, if you will. it is the first insta nce if you will. it is the first instance of an outright populist government coming to power in a european area country. italy has long been seen a weakling for the eurozone, but now both parties in the coalition have dropped their earlier demands are leading the euro, but what they did campaign on is this change in public spending, and they are approaching a decision point. not only does it go against european rules, but more importantly i would argue the risk setting off an adverse reaction in financial markets, which italy with its still wea k markets, which italy with its still weak economy can hardly afford at the moment, so the stakes are high. the stakes are very high. we will listen to the economy minister very soon to see w

other tale of these two strategies on deficits who is to release the budget for the next year giovanni tria and the call there is for mr tria to increase spending to accommodate the the president sergio. promises that he made in the presidential campaign and italy is already on a rough and rocky road with their economy right they certainly are and it's very interesting to see they're going into a stand a campaign political campaign and so to cut spending there will be very interesting to see in fact. italy has declared the going to increase spending which is very interesting insofar as it runs against e.u. debt limits the e.u. has very strict rules about debt limits there not being more or less than three percent of g.d.p. so we have to wait and see whether that. says they're going to care more about italians and they're going to care about the e.u. so they're going to increase spending i think for political reasons as well so interesting before we let you go professor i wanted to circle back on a matter that we talked about once or maybe twice and that is something that i assume is not goi

giovanni trio wants to bring the deficit down to below two percent of g.d.p. but the five star movement and the league are pushing for a looser target the government has threatened to sack tria if he doesn't bend to their will italy has been gradually bringing its budget deficit under control the country was hit hard in the global financial crisis in two thousand and eight within a year its deficit ballooned to five point two percent of g.d.p. but by twenty fifteen it was below the euro zone's three percent benchmark and last year the deficit was down to two point three percent of g.d.p. . the central bank fears that even a minor spike in the deficit would send italy's did out of control is only has the second highest public debt in the eurozone after greece and analysts believe that italy's debt figures are underestimated because they don't adequately factor in the cost of supporting the country's ailing banks. earlier we spoke to a list here with kathy from the brussels based economic think tank bruegel and i asked him if italy can afford an expensive welfare program this government is defined to be a populist government because he has been promising something in the order

italian finance or finance minister giovanni tree at six pm eastern time in the us but reports that his meeting with officials could be delayed has rattled investors mr tria is not associated with either the league party or the five star movement meanwhile in comments to the media the top leaders of both coalition parties push for more fiscal space. it's two and expending increases promised by five star and tax cut commitments from the league. in other u.k. news the labor party has unveiled their economic agenda at the opposition party's annual conference among the platform planks is a demand that workers be given the power to elect one third of the seats on the boards of all companies in the u.k. with more than two hundred fifty employees that standard would grant this measure of workplace democracy to an estimated ten point seven million workers current prime minister trace i'm a made a similar but much less optimistic or robust proposal back in twenty sixteen labor leader jeremy corbin pledged at the meeting quote by ensuring businesses reserve a third of the board seats for workers will help transform our broken economic model corben ally john mcdonal