The bailouts of Italian banks cause the public deficit to rise more than expected. This is certified by Istat, according to which the impact on debt in 2017 of the operations carried out on Popolare di Vicenza, Veneto Banca and Monte dei Paschi was equal to a total of 6,3 billion euros. The statistical institute today released the quarterly general government account, relating to the fourth quarter of 2017.
In detail, the recapitalization and refreshment of the "junior bondholders" of Ps, which occurred respectively in July and November 2017, weighed on the public accounts by around 1,6 billion euros, compared to the 1,1 billion previously estimated.
With regard to Venetian banks, the “booking corresponds to a capital transfer of 4,756 billion”, writes Istat in the note published today.
The accounting - writes the National Statistical Institute - was carried out in agreement and according to the methodological indications provided by Eurostat which on Wednesday 3 April in turn published a report on the weight the rescue of Veneto Banca and Pop Vicenza had on deficit and public debt. Last August, in fact, Istat had asked its European counterpart for an opinion on the procedures for recording bank operations.
Eurostat revised net borrowing upwards by €4,7 billion, while limpact on debt amounted to 11,2 billion euros, of which 4,8 connected with the transfer to Banca Intesa (direct effect) and 6,4 with the reclassification of the liquidation liabilities of the two banks mentioned above (indirect effect). "Since the previously disclosed data already included the direct effect, on the occasion of the Notification the Bank of Italy revised upwards the debt estimate for 2017 to take into account the indirect effect", underlines ISTAT.
Thanks to the new calculations that take into account the bank bailouts carried out last year, the Institute has revised upwards the estimates on the ratio debt-to-GDP, rose to 131,8% against the previous 131,5%. The debt stock is equal to 2.263 billion euros. However, the debt/GDP ratio is down compared to 2016, when it was 132,0%.
The estimate on deficit for 2017 instead rises to 2,3% versus 1,9% previously expected. In numbers, public administration debt rose from 33.184 million euros to 39.691 million. Also in this case, compared to 2016, the figure is still improving (it was 2,5%). However, the impact of the Eurostat audit (4,7 billion for the Veneto banks) on the 2017 deficit will not be taken into consideration by the European Commission in assessing the Italian case for the purposes of compliance with the stability pact.
The EU Commission "has taken note of the impact on Italian public finances deriving from the liquidation of the two Veneto banks, as estimated by Eurostat in cooperation with Istat, and notified on 30 March". This was stated today in Brussels by a spokesman for the EU Executive, adding that "the Commission will assess Italy's budgetary situation in May, on the basis of the final data from Eurostat and the spring economic forecasts" of the EU Executive itself.
But stay tight room for maneuver in view of the Economic and Financial Document (Def) that the new government, when there is, will have to present in Brussels.
(Updated at 17.26)
