Budget maneuver, a plan for Italy in ten days

On the one hand, the “realism” and “prudence” guaranteed yesterday by Economy Minister Giancarlo Giorgetti to his Ecofin colleagues, the first “European” test for the holder of the Treasury. On the other hand, the need to put some of the electoral promises on paper, at the same time as having to move between the tyrannical folds of a small blanket called public accounts. These are the two poles between which the first maneuver of the Meloni era will be born. And mediation has already been identified: the bulk of the available budget – about 23 billion – will be invested to mitigate the effect of high bills. But there will also be room for “tastings” on taxes and pensions. Perhaps finding the necessary resources through the cuts that will be made in two measures that are the flag of grillismo: the Citizenship Income and the Superbonus. Thus, a “little” Flat tax (extended to 85-90 thousand euros for self-employed workers and not 100 thousand), a “little” Quota 41 (it will not apply to everyone but will have a minimum age limit for access ) and a “bit” of fiscal peace. By deleting folders of bad debts with a value of less than one thousand euros, even if the dream was to bring the limit to three thousand.

The additional difficulty – as if the others weren’t enough – is in the timing. Matteo Salvini clarified them yesterday: it will take ten days to bring the first draft of the Stability Law to the Council of Ministers. At most, the Cdm in question can be held in the last ten days of November. That’s because the unusual autumn election has already forced the government to delay writing the text by a month, compared to usual practice. Once the text has been released, it will be sent to Brussels to start the dialogue with the European Union. The hope is that there will be no opposition to the numbers already drawn last Friday at Nadef. With government forecasts and 2023 net debt brought to 4.5% of GDP, there are around 30 billion available to be split between the quarterly bailout decree likely to be fired this Friday (about 9 billion) and the rest to invest in 2023. In the end, Europe could be convinced not only by the context – that everything requires less “restrictive” maneuvers – and by the reassuring words of Giorgetti, but also by the very conservative estimates of GDP trends. For 2022, despite the value already acquired in the third quarter being a growth of 3.9% and the job market showing encouraging signs, the government indicated an increase of “only” 3.7%. Eventually, the value may be higher. And open margins for intervention also for the first half of 2023, in case the expensive accounts do not present calculations at the beginning of next year.

Then, of course, we will have to start dealing with the monstrous public debt, especially considering that the suspension of the Stability Pact will end at the end of 2023. But the hope, until that date, is to have contributed to a less obtuse and restrictive rewrite. of continental budget rules. Above all, this was discussed at Ecofin in Brussels. Tomorrow, by the way, the European Commission will present its guidelines for the new Stability and Growth Pact, which will serve as a basis for the discussion that will lead to the new instrument in 2024. The new rules should provide for debt repayment paths adapted to countries with specific commitments , in the Next Generation EU model, in exchange for flexibility. “Certainly there must be some progress, but any hypothesis must have requirements: simplicity and feasibility,” noted Giorgetti. From Italy, the EU expects “a lot of caution, as it is necessary for countries with high debt”, as Commissioner Paolo Gentiloni said. With Giorgetti, “the exchange was absolutely positive”, said the president of the Eurogroup, Paschal Donohoe, who praised “a very strong commitment to the proper management of Italian finances”. Almost with a twist, Giorgetti confirmed the previous government’s commitment to ratifying the reform of the MEE Treaty, the Save States Fund, which Lega and Fratelli d’Italia opposed at the time. Only Italy and Germany are absent from the appeal, the latter awaiting the Federal Constitutional Court’s decision on an appeal. «I attest to the positions of the previous government of which I was a part. We await the decisions of the German Court and then we will decide”, said the minister at the end of the Eurogroup. A change of direction that suggests a new line of thinking by the government’s centre-right regarding EU rules.