“Italy is growing, it's getting better every year but getting better doesn't mean doing well”. So the premier Matteo Renzi he addressed the audience of the Ambrosetti Forum – The European House in Cernobbio, where he is participating for the second consecutive year.
The reference is to the latest GDP update released this morning by Istat. The growth in the second quarter, the Institute of Statistics certified, was unchanged compared to the previous three months, confirming the estimate of 12 August. So no upward revision. The expectation was triggered by some information leaked two days ago by the Mef on an upward economic revision based on the latest data on the turnover of services. However, they explained from Istat that other components, especially credit and insurance, have moved in the opposite direction. However, on a trend basis, GDP has increased by 0,8% instead of the 0,7% previously estimated.
The data arrived precisely on the opening day of the traditional Ambrosetti workshop at Villa D'Este during which both the premier and the Minister of Economy Pier Carlo Padoan took part. It is an all-out Renzi who arrives on the shores of Lake Como, before leaving for China where he will participate in the G-20 over the weekend. The premier's first words displace everyone: "The problem of 2016 is not the economy", which is also at the center of the debate in Cernobbio, between past budgets and above all future scenarios. "I'm not interested in talking about the things the government has done in the last 30 years, I prefer to talk about Italy in the next 30 years".
On the economy then Renzi certainly gets there, starting with the role of Europe: “On the economy, Europe must once again have a shared and strong word. It must be hope and future, not a museum of the past”. Then the Jobs Act, for which the glass is “half full”: “Thanks to the labor reform we have recovered 585 jobs. I would have signed for much less, but the point is that we moved 15-20 years late. Two days ago I received Angela Merkel in Maranello, Germany started ahead of us with the reforms and the results can be seen”.
RENZI, DEFICIT AT THE MINIMUM. PADOAN: IT WILL CONTINUE TO DOWN
The premier also claimed the result achieved on the deficit front: “The deficit, according to Istat data, is at its lowest level in the last 10 years and is continuing to fall. In such conditions it is difficult to grow much, Spain is growing more than us but has a 5% deficit. We lower the deficit not, or not only, because Europe asks us to, but above all for our children", explained Renzi, also recalling that the watchword is one: "Reduce the tax burden, and we are doing it" .
And on economic policy, Economy Minister Pier Carlo Padoan gave some further elements, speaking shortly before the premier. In particular, the budget law, which will be presented in October in Parliament and at the same time in the European Commission, confirms, Padoan said, the principles adopted so far, therefore the consolidation of public finances and support for growth, albeit in a context in which the fiscal space has shrunk both because inflation has fallen and because of the commitments made by the Government.
"The deficit with respect to GDP will continue to fall," Padoan said, assuring at the same time that there will be resources available. First, €15 billion will be dedicated to removing escape clauses to avoid tax increases. "This will be the Government's first commitment" said Padoan adding that the "remaining resources will be dedicated to growth, competitiveness and productivity".
2017 IRES REDUCTION CONFIRMED
The measures, currently being defined, concern investment support, productivity incentives and tax reductions, which are already incorporated in the budget. "The 2017 IRES reduction will be confirmed", he said, specifying that the Government is evaluating, "also in the light of previous experiences, where to put the resources to have a selective and motivated use in support of growth, productivity and competitiveness" . Padoan's hope is that "companies can make the most of it" hoping "that what we will do, which will always be less than what we would have liked to do, will also be useful". Further interventions concern attention to the weakest groups and the elderly. On the earthquake, Padoan specified that the strategy is being defined, a challenge that requires resources "but above all organization and managerial leadership and it is on this that the government is moving". In this regard, Renzi added: “I'm asking the best to get involved and come and give us a hand. In a few hours I will see the rector of the Milan Polytechnic, Giovanni Azzone, and I will involve him in the Casa Italia project".
GLOBAL SCENARIO, DEEP DIFFICULTIES AT G20 LEVEL. GOOD FOR THE ECB, BUT PROBLEMS TO CONTINUE
On the other hand, the context in which we operate, if it cannot be defined as one of secular stagnation, presents symptoms of a slowdown that are deeper and more complex than previously thought. "I don't think we are in a secular stagnation, but the difficulties of economic growth are profound at the G20 level", explained Padoan outlining the international economic scenario and the lessons we can draw from the common elements of the weakness that characterizes different regions in the world . For Padoan it is necessary to mobilize together keeping in mind some guiding principles: not only to use all the tools available but also to use them in a coordinated way ("fiscal, structural and monetary policy must support each other", Padoan specified); countries must act in a coordinated way and take into account the consequences on other countries. “Today – he added in his speech – we are in a critical phase of macroeconomic policies – he said – monetary policy has radically transformed since the beginning of the crisis and has proven to be effective, but it has shown that it has problems pursuing the paths hitherto traveled".
REFERENDUM
Values, history, culture are themes that Renzi tries to put on the table of the Cernobbio establishment, going beyond the numbers: "The crucial issue for Italy is to get back to being competitive with values and culture". As well as with a lighter apparatus. In fact, the grand finale is all about the referendum, the great autumn theme which also holds sway on Lake Como and which will be the subject of debate especially on Sunday, when various ministers of the Renzi government will intervene: "The tones have become extreme, even my fault I must say. If No wins, there's no end of the world, there's no locust invasion, but the situation remains as we know it. If, on the other hand, the Si wins, Italy becomes a simpler country, with fewer seats. And a less agile country is a less strong country”.
