Minister of Economy Giancarlo Giorgetti reiterated that one should be cautious about manoeuvring, that not all demands of ministers can be accepted, and reminded that the increase in interest rates narrows the area of public finance and makes our debts more burdensome. “If rates had stayed the same as they were last year or two years ago, we would have had 14-15 billion more to put into the tax bill, but they’re not there anymore and it’s going to be harder.”
“I am not afraid of the EU’s decision on debt, but of the markets’ decision”
Stating that debt sustainability is currently a priority, the minister said on the occasion of the conference: “What scares me is not the decision of the EU Commission; what scares me is the evaluation of the markets that buy the public debt and I tell the Ministers that I respect their work, but every morning I face the problem of selling the public debt.” .
“Interest rate increase slowed down the economy”
Then the attack on the ECB and the interest rate increase once again decided to stop inflation. The minister thundered that the target of bringing inflation back to 2% “has not yet been achieved, but the fact that the economy is slowing down is a clear fact.” “It’s clear that restrictive monetary policy is intended to slow growth, and I must say, it has done so brilliantly.”
Meanwhile, OECD revised its growth forecasts for our country to below 1 percent both this year and next year, predicting a GDP of +0.8 percent for both 2023 (-0.4 percent compared to previous June forecasts) and 2024. predicts. (-0.2 percent), after +3.8 percent in 2022.
“An agreement will be reached on the Stability Pact”
Giorgetti returned to talking about the Stability Pact, stating that he was confident “an agreement will be reached by Christmas, if not in October”. Italy will continue to ask for investments to be excluded from the scope of the Stability and Growth Pact because “the expenses of investments of at least 80 billion dollars, constantly increasing, with super bonuses to be spent on debts in the next 3-4 years and financed by Pnrr loans are very significant”, “the debt reduction rule It is mathematically impossible to comply”.
Pnrr, AB: “The third installment payment is coming soon, in Italy time”
Meanwhile, the EU Council gave the green light to Italy’s changes for Pnrr’s fourth game. The EU Council reminds that Italy’s modified plan “covers 10 measures, including energy efficiency incentives called Super Bonus, an increase in childcare facilities, the development of the space and film industry and sustainable transport.”
Brussels announced that “the implementation of the Italian Pnrr is ongoing, but faces an increasing risk of delays”, reminding that our country has so far submitted “three payment requests corresponding to the 151 stages and targets of the plan, which include: payments totaling € 42 billion (submitted referring to the first two payment requests)”. Payment for the third installment will arrive soon.
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Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.