Italy's Renzi says EU deficit rules outdated but will stick to limits

ROME (Reuters) - Italian Prime Minister Matteo Renzi declared on Wednesday that the European Union's budget deficit limit of 3 percent of economic output was outdated but that Rome would respect its commitments even as it focused policy on growth and jobs.

"The 3 percent parameter is, objectively, an anachronistic parameter," he told parliament to applause from deputies, adding however that he would respect Italy's pledges to remain within the 3 percent threshold.

Renzi was speaking a week after his government announced billions of euros in tax cuts and growth measures which he said would be partly funded by an increase in Italy's budget deficit while respecting the 3 percent limit.

"The discussion today isn't about the 3 percent, and I repeat today that there will be no breach on our part," he said. "The subject today is about using the space that's available, not breaching the limits from Europe."

(Reporting By James Mackenzie)