Government strategy: 23.5 billion deficit in three years. Giorgetti: “Hard choices need to be made”

Speaking about the next maneuver, Economy Minister Giancarlo Giorgetti reiterated that Italy “finds itself facing a delicate situation, difficult choices are needed.” In his report to Parliament on Nadef, the minister stated that the revision of public deficit targets to be higher than in the past (causing the spread to increase) would make available a budget of “3.2 billion in 2023, 15.7 billion and 4.6 billion in 2024″ he explained. In 2025”. This means 23.5 billion euros over three years, and some of these funds will be used immediately and the decree is under preparation.

“However, the target balance in 2026 implies an adjustment of €3.8 billion compared to trend net debt, allowing it to be brought below the 3% threshold.” So how will these funds be used? What is the Meloni government’s strategy for the next three years?

“Budget deficit is below 3 percent in three years”

Without further ado, Giorgetti explained that the situation was “more delicate than envisaged in the spring” and noted that “public finances are burdened by the burden of creating stimulus, the increase in interest rates and the slowdown in the international economic cycle.” This is precisely why the government asked Parliament for permission to impose a larger deficit: from 5.2% to 5.3% in 2023, freeing up 3.2 billion euros; 4.3%, up from 3.6% in 2024, to bring almost $16 billion into the next budget bill; In 2025, we will reach 4.6 billion more, increasing from 3.4% to 3.6%. Then the following promise is made: “The budget deficit will fall below 3 percent within three years.”

With these funds, the government will seek to solve “the most pressing problems (inflation, energy and food poverty, demographic decline)” while encouraging investment, innovation, sustainable growth and the economy’s ability to respond.

“Privatization at the rate of 1 percent of GDP is expected within 3 years”

This is the only possible strategy the government has identified to reduce taxes without strangling the economy. “Support for growth is based on determining a balance point between investments and the purchasing power of Italian families and budget discipline and the reduction of the debt/GDP ratio,” the Minister writes in the foreword to the update note of Minister Def Economy -. This will also be possible through the disposal of public company shares.”

To guarantee the sustainability of the debt and “consistent with a more dynamic management of public shares, the new programmatic scenario envisages proceeds from divestitures equal to at least 1% of GDP in 2024-2026”, the Minister noted. This “will involve the disposal of shares in public companies where there are commitments to the European Commission in connection with the regulation of state aid or where the public sector ownership share exceeds that required to ensure unity of strategic direction and consistency”.

But the government does not just want to divest assets, it also aims to “acquire strategic stakes in key sectors for the modernization and digitalization of our economy, such as telecommunications networks, as well as adopt innovative policies for the development of infrastructure.” .

Emergency decree coming for pensions, public administration and immigrants

The Nadef report submitted to the parliament includes the following statement: “In 2024 and 2025, resources will be used as part of the next budget bill, and in 2024 to reduce the tax burden on the workforce and implement the first phase of the tax reform.” “Support to families and parenting, continuing the renewal of public administration contracts, with particular reference to healthcare, strengthening public investments and financing of unchanging policies, prioritizing those envisaged in the Pnrr”.

The decision on the use of open resources, equivalent to 3.2 billion euros for 2023, will also be made soon. “Emergency measure” for “early adjustment of the Istat regulation for pension payments expected for 2024, measures for public administration personnel and measures for the management of migration flows”.

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Source: Today IT

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