Italian Prime Minister Silvio Berlusconi on Sunday revived vows to cut taxes to boost the economy this election year - even at the cost of a bigger budget deficit.
"The economy needs a shock," he said at an economic conference in the northern Italian town of Cernobbio, adding that a tax-cut programme needed to be carried out "immediately".
Berlusconi said the Economy Ministry was studying a proposal to cut Italy's personal income tax ceiling to 33 percent from a current 46 percent.
The euro zone's third-largest economy grew just 0.3 percent in 2003 - its worst performance in a decade - and consumer confidence has recently hit record lows.
But with European and local elections looming in June, Berlusconi's centre-right coalition has started to shift economic policy away from deficit control towards growth.
On Sunday, Berlusconi joked that exceeding the budget deficit limit set by Brussels of 3.0 percent of gross domestic product was not illegal.
"It's not a crime to exceed the 3.0 percent deficit," Berlusconi said. "We don't want to exceed it, but sometimes a deficit for a short period can be positive to overcome a period of economic stagnation."
In the past, Berlusconi has said it would be logical to raise the limits laid out in the European Union's Stability Pact for brief periods of time to help economies.
Italy's deficit came in at a better-than-expected 2.4 percent of GDP last year thanks in part to one-off measures, while France and Germany have repeatedly crashed through the ceiling.
Berlusconi made tax cuts one of the cornerstones of his campaign in 2001, but the deficit and a debt pile equivalent to 106.2 percent of GDP at the end of 2003 have made it hard for the government to follow through.
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