Italy votes on milk quotas

The Italian government has called for a vote of confidence in a bid to reach an agreement on EU milk quotas.

Government coalition parties have backed an initiative to make Italian farmers repay €650 million in EU fines for the overproduction of milk.

But one, the Northern League, is opposed to the fines.

Nonetheless, the Italian government is expected to win the confidence vote.

"We are confident all will go well in the vote,"​ agriculture minister Gianni Alemanno told a Reuters reporter.

The issue of milk quotas is one of the major obstacles that stands in the way of implementing a new European Union tax reform plan.

This is because Italy has linked EU approval of its milk quota repayments to the country's approval of an EU agreement on the taxation of income from EU savings held abroad.

Italy wants its farmers to be allowed to pay the money they owe in installments.

However the European Commission, which looks out for illegal state aid, has raised doubts over the legality of the Italian decree, fearing it could be a form of unlawful state aid.

A settlement on the milk quota issue is likely to be reached at the next meeting of finance ministers on 3 June 2003.