(By Massimiliano D'Elia) The Minister of Economy and Finance Giancarlo Giorgetti spoke remotely at the Rimini Meeting of Communion and Liberation and, with unusual pragmatism, warned insiders and public opinion that the next “Budget Law sit will be complicated. Not everything can be done."
But which Budget Law is not complicated for our country? With a public debt a 2843 euro (June 2023) in the face of a GDP that is struggling to grow, all Budget Laws become a challenge for every government of any political color.
Then Giorgetti turned to Brussels, in view of the probable request to resort, even if minimally, to a new deficit, in consideration that at the end of December the suspension of the constraints of the Stability Pact expires (not being able to go beyond 3% of the deficit/GDP ratio - according to the MEF, Italy should settle at 2024% in 4,5): “We are a responsible government, we have always reiterated this, but one that asks the EU to understand the meaning of history and of the moment we are living in, otherwise everything becomes complicated and perhaps even self-defeating”.
The minister clarified the government's political objectives"Certainly we will have to intervene in favor of medium-low incomes, as we did with the decontribution, because inflation enormously reduces purchasing power, but we will also have to use the resources that are available to promote growth and reward those who work”. Therefore, it is difficult to review the excise duties on fuel because they would affect the provision that has become a priority of cutting the tax wedge for income up to 35 thousand euros which will cost 9 billion to which would be added 3-4 billion needed to start a first cut in personal income tax . Probably, as Il Sole24Ore writes, 2,5 billion will be dedicated to health care, while the rest of the interventions will go to pensions and expenses that cannot be postponed.
On the Pnrr Giorgetti reiterates that it is necessary to do well and not rush to make mistakes: "Resources cannot be wasted and must be used in the best possible way. There isn't simply punctual respect, doing it quickly, but doing it well. If hurrying means hurting, it's better to do well but evaluate situations carefully, because it's a unique opportunity".
On the loaned money of the Pnnr"Nothing is free, when it comes to debt and deficits we have to think about sustainability and when public resources are used, the effort to use them in the best possible way must always be maximum”.
On pensions, Giorgetti has raised an alarm that should make all workers who hope for a dignified pension that partially reflects the contributions paid tremble: "There is no social security reform or measure that holds in the medium and long term with the falling birth rate numbers we have today”.
Given the extent of the maneuver that gets around a about 30 billionresorting minimally to further public debt before the suspension of the Stability Pact expires is a possibility being examined by the Dicastery in via XX Settembre. Going beyond the 3,7% indicated in last April's Def would favor the financing of some of the measures in the pipeline.
A small deficit can only be made against a commitment with Brussels to reduce the debt. However, months ago Italy had reassured the markets, investors and member countries of the eurozone that it wanted to launch a progressive plan to reduce the enormous public debt, bringing it to 141,4% in 2024 compared to 142,1% in 2023. Hence the need to find most of the coverage from other measures such as the tax One-off on the extra profits of the banks or re-implement a slight spending reviews to the expenses of the state apparatus, even if the same from the first calculations will be able to guarantee only 1,5 billion.
Source Mef on income and expenses divided by accrual and cash.
Expectations are placed: on the revenues of the tax for the extra profits of the banks (estimated in a range that goes from 3 to 10 billion), on the already agreed third installment of the Pnrr (18,5 billion) and on the higher revenues from the exchequer tax revenue (there is a lot of expectation after the extraordinary summer season and the boom in foreign tourists).
Naturally, there is also hope for an increase in GDP, estimated for 2024 from 1 to 1,5%. However, these forecasts are susceptible to variations in the Community and world economy especially following the already announced technical recessions of Germany e Holland and the probable financial bubble following the debt restructuring request (340 billion dollars) of the Chinese real estate giant Evergrande.
Not secondary for the world economy are the repercussions deriving from the Russo-Ukrainian war and from the continuous tension that is recorded in the Indo-Pacific following the Chinese ambitions towards the island of Taiwan. For now, the possible war in Niger which could set fire to the whole Sahel with inevitable consequences on the Old Continent, in terms of increased migratory flows and increased social tensions, is not yet considered.
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