From measures against high energy prices to Nadef. It begins a torrid week for the government, which was asked on Monday to approve the interventions against the electricity and fuel increases and on Friday the updated communication to the Def with the estimates that will form the basis of the maneuver that will take place until To be presented in mid-October.
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Measures and documents must be developed in the narrow field of tension between the uncertain growth prospects, the widening spreads, the delays in the Pnrr, the debiting of accounts by the super bonus and the tightening of monetary policy by the ECB. A puzzle that makes it difficult to find the right solution to elaborate the maneuver, which according to the government’s hypotheses should be around 30 billion euros, while the safe cash cover is currently only 5.5 billion.
Bills and petrol bonus
The package of measures against the high bill and fuel costs is expected in the Council of Ministers on Monday. The interventions of the legislative decree include the extension of aid to electricity and gas consumers, including the so-called bill bonus; the petrol bonus loaded onto the “Dedicated to you” social card; the 5% VAT on gas and the termination of the protected market for domestic customers with a particular focus on the situation of the vulnerable.
Towards new estimates of GDP and accounts
Nadef could Adjust GDP estimates downwards. Endogenous variables related to the slowdown in consumption and investment, the stop of the super bonus and the delays in the Pnrr are weighing on growth, but also external factors such as the ECB interest rate increase, which entails 14-15 billion more in public debt refinancing costs, which Slowdown of the European economy, led by Germany, and the continuation of the war in Ukraine. In the latest GDP estimates, Istat reduced second quarter growth to -0.4%, with a change of +0.7% calculated for 2023, compared to +1% indicated in the April definition. For 2024, the Def envisages a programmatic share of 1.5%. For the spring deficit, the government forecast levels of 4.5% in 2023 and 3.7% in 2024 as a percentage of GDP; for debt, the estimate is 142.1% in 2023 and 141.4% in 2024.
Maneuvering on the construction site
In order to maximize the ministries’ demands for the maneuver, over 30 billion are needed. The refinancing of the tax wedge reduction costs 9 billion euros, the first step of the tax reform by merging the first two tax rates costs 4 billion euros, at least 2 billion is needed for health care, at least 4 billion for families and the birth rate, to confirm the pension package (so no adjustments) 2 billion. Another 6 billion will be used for non-deferrable expenses, peace operations, etc. Confirmation of preferential taxation of productivity bonuses and fringe benefits up to 3,000 euros costs 2 billion; Finally, the renewal of public employment contracts alone requires at least 2 for the start-up. However, the safe cover is currently only 5.5 billion (4 billion in cash from the better result of 2023 and 1.5 billion in cuts from the ministries).