According to the Reuters news agency, the president of the European Central Bank Mario Draghi told the Italian Finance Minister Giovanni Tria, behind closed doors after the Eurogroup meeting, that Italy's high public debt requires a degree of serious fiscal discipline.
Draghi had already expressed concerns about the Italian situation during the press conference at the ECB last 25 October. In particular, he pointed out that the highest risk point concerns the banking system that could be affected by the loss of value of government bonds, whose prices fall as interest rates rise. The Italian minister Giovanni Tria after having had the "tornado" from the influential president of the ECB has reiterated that the decisions of Rome do not change: "I am an economist and a politician but I am here as a politician". Minister Tria has made it clear that he must maintain the position and defend the decisions of the government yellow-green.
Also contributing to the situation in Italy was the ISTAT, which reported data on the statistical indicator that anticipates the trend of the economy, highlighting a further decline, signaling the persistence of a phase of weakness in the economic cycle, after the Third-quarter GDP was flat.
Then came the EU forecasts cut 2018 GDP from 1,3% to 1,1%, and retouch the 2019 GDP from 1,1% to 1,2%. “After solid growth in 2017, the Italian economy slowed down in the first half of this year due to the weakening of exports and industrial production. A recovery in exports and higher public spending will support growth moderately but the associated risk in the deficit, together with higher interest rates and considerable downside risks, endangers the reduction of high debt, ”the text reads. As for 2019, "delays in implementation and administrative bottlenecks are expected to delay the moderate growth impact of the measures" of the maneuver. "The recovery of private investment is expected to slow down as the tail winds of monetary policy and fiscal incentives dissolve, and because of companies facing tighter credit conditions, linked to the impact of the spread on credit supply", continues the Commission.
“In 2020, GDP is expected to grow by 1,3% supported by investments, especially in the construction sector. Exports are expected to grow broadly in line with the market, while Italian exporters should maintain their competitive position, containing 2018 losses, ”writes the Commission.
The deficit increases: estimated over 3% in the 2020 The EU Commission revises upward estimates of the Italian deficit: in 2018 from 1,7% expected in spring it rises to 1,9%, and then splashes to 2,9% in 2019 "because of the measures programmed "as income of citizenship, Fornero reform and public investments that" will significantly increase spending ".
In 2020 it breaks through the 3% roof, reaching 3,1%. The EU specifies that this figure does not take into account the safeguard clause, ie the increase in VAT, given the "systematic sterilization". The debt remains high "Due to the deterioration of the balance sheet, together with the downside risks to growth, the high Italian debt will remain stable around 131% over the entire forecast period" ie 2018, 2019 and 2020, writes the Commission in the new autumn economic forecasts.
Italy is also the latest for growth across Europe for both 2018 and 2019 and 2020. With 1,1% this year, even the UK despite the difficulties related to Brexit does better with 1,3%. In the 2019, at the same level of GDP as the 1,2% of Italy there will be only London, but by now it will already be outside the EU. The worst growth after Italy will be 1,5% of Belgium, second with 1,4% also in 2020 behind the Italian 1,3%. Declining unemployment Unemployment in the eurozone and the EU continues to fall, to fall to the record level below the 8% bar in the 2019 (7,9% in the 19 and 7% in the 27) and below that of the 7% in the 2020 ( 7,5% in 19 and 6,6% in 27), which would be the lowest level ever reached since the beginning of the 2000 statistics series. For 2018 the rate is 8,4% in the eurozone and 7,4% in the EU. The creation of employment, on the other hand, slows down due to lack of labor and slower growth, with 1,1% in 2019 and 0,9% in 2020 in the eurozone.
The EU Commission envisages "only a slow improvement" for the labor market in Italy, and slightly revises the estimates of unemployment: from 10,8% in 2018 expected last spring it goes down to 10,7%, and from 10,6% of 2019 drops to 10,4%, and then reaches 10% in 2020.
Moscovici, “The quality of the work of the EU Commission and its impartiality cannot be called into question”, which is why the estimates of Brussels are different from those of the Italian government, “they must not lend themselves to the slightest controversy. Italy has not been subjected to particular treatment but has had the same treatment as all the other countries ”, with which there are usual differences between the forecasts. "Italy is not alone in this situation", it has already been there "with previous governments".
The Minister of Economy Giovanni Tria criticizes the analysis of the EU by defining it as partial and not attentive.
According to the President of the Council Giuseppe Conte “The EU Commission's growth forecasts for next year underestimate the positive impact of our economic maneuver and our structural reforms. Let's go ahead with our estimates on public finances, on growth that will increase and on the debt and deficit that will decrease. There are no conditions to question the validity and sustainability of our forecasts "writes the premier, specifying that" the deficit will decrease with growth and this will allow us to decrease the debt / GDP ratio to 130% in the next year and up to 126,7% in 2021 ".
Tomorrow Tria will meet in Rome the president of the Eurogroup Mario Centeno.