From our correspondent
BRUSSELS – The European Commission pushed ahead with the financial maneuver with reservations. The draft budget law “does not fully correspond” to the Council’s recommendation of last July, “but it is not a rejection, but a call for a prudent budget policy and full use for investments and the reforms of the PNRR,” explained Economic Commissioner Paolo Gentiloni.
Giorgetti: “Everything as expected”
Economy Minister Giancarlo Giorgetti was not surprised: “We accept the Commission’s verdict.” “Everything as expected,” he commented, “despite the negative effects of energy and super bonus, we are moving forward with healthy realism.”
The reliefs
Brussels has identified three critical points: higher net primary spending in 2023 than expected at the time of the recommendation (0.8% of GDP) due to superbonus tax credits, weighing on the overall assessment; the use of the savings associated with the phasing out of energy support measures not to reduce the deficit but for other purposes; the limited extent of the impact of the tax cut on labor. The EU Commission therefore calls on Italy to “be prepared to take the necessary measures within the national budget process to ensure that fiscal policy in 2024 is in line with the recommendation.” However, this does not mean that Italy should prepare for a corrective action. “Our invitations are uniform for the different country groups. And for countries that do not fully comply, there are calls to take appropriate measures and not to carry out corrective measures,” Gentiloni clarified in response to a question.
The proceedings
In total, there are nine countries that are “not fully compliant,” including Italy. The others are Germany, Austria, Luxembourg, Latvia, Malta, Holland, Portugal and Slovakia. However, France, together with Belgium, Finland, France and Croatia, is at risk of not complying with the Council recommendation due to excessive public spending. Full funding only for seven EU states: Cyprus, Estonia, Greece, Spain, Ireland, Slovenia and Lithuania.
Is everything OK then? Not really, because the Stability Pact has been back in force since January and the July recommendations were the first “quantitative” recommendations since the rules were suspended in 2020. After the European elections in June, “the Commission intends, based on the results of the budgetary data to initiate an excessive deficit procedure for 2023,” recalled EU Commission Vice President Valdis Dombrovskis.
Italy is therefore at risk from the procedure. Brussels concludes its opinion by declaring that Italy’s nominal budget deficit will be 4.4% of GDP in 2024 (above the 3% foreseen in the Treaties) and that public debt will be 140.6% of GDP in 2024 GDP will be higher (above the 60% set in the Treaties). contracts) “but 6.5 percentage points below the rate at the end of 2021”. In addition, according to Brussels, Italy has “made limited progress on the structural elements of the budgetary recommendations formulated by the Council on July 14, 2023 and therefore calls on the Italian authorities to accelerate progress.”