Beware of debt, the ECB warns that this is not the time to let our guard down: "In order to avoid repeating the errors of the governance framework in force before the crisis, it is important that the debt rule, one of the main lessons imparted by the crisis, is not overruled part". In the aftermath of Greece's rejection, for which the ECB has closed its liquidity window, the monthly bulletin of the European Central Bank also warns the other countries, recalling the flexibility rules introduced in the Stability Pact to encourage growth.
In particular, with reference to Italy, the ECB recalled that with the new rules which make the application of the Stability Pact flexible in the event of an unfavorable economic situation, "the structural effort required of Italy in the context of the preventive arm would be halved to 0,25% of GDP, recalling that compliance with the debt rule is a binding requirement of the Stability and Growth Pact".
The ECB's intervention therefore manages to thwart the "risk of inconsistency" of the new interpretation of flexibility in the public finances of the European Commission, when precisely with regard to the debt rule, and on several occasions, the commissioner responsible for Economic Affairs Pierre Moscovici he had noted that in the case of Italy its rigorous implementation would have been particularly penalizing at this stage, suggesting that the Commission will probably not stick to it.
The reduction in structural adjustment requirements can be quite substantial given that countries can resort to all three provisions cumulatively. However, flexibility must be carefully calibrated so as not to jeopardize debt sustainability and its consistent application across countries and over time”.
The three measures referred to by the central bank are: the new treatment of cyclical conditions within the preventive arm (the phase prior to the one in which a member state is sanctioned for not observing the rules of the Pact, ed); the consideration of structural reforms and the treatment of public investments with the reintroduction of the clause applied in 2013-2014 and then suspended for 2015 (initially the observance of the debt rule was mandatory and for this reason the request to use this clause made by Italy last spring was was rejected, but today this constraint has been removed). As far as reforms are concerned, the ECB specifies that "only the structural reforms that are actually implemented should be taken into consideration".
