Bankitalia takes the field on pensions: "The latest projections on social security expenditure highlight the importance of guaranteeing the full implementation of the reforms approved in the past, without going backwards". This was underlined by the deputy general manager of Via Nazionale, Luigi Federico Signorini, during a hearing in the Senate on the update note to the Def. The reference is to the request of the unions, supported in parliament by a transversal Damiano-Sacconi front, to defuse the next automatic adjustment of the retirement age to life expectancy, which should raise the bar to 67 years in 2019.
“As the Governor of the Bank of Italy recalled in his recent speech – continued Signorini – all the pension reforms implemented in more than twenty years have substantially improved both the sustainability and the intergenerational equity of the system”.
However, the Deputy General Manager of Bank of Italy pointed out again, “the demographic and potential growth prospects have been updated and are less favourable. The most recent projections of the incidence of expenditure on the product, recently disclosed by the State General Accounting Office, are consequently higher than previously projected”.
As for the recovery, according to Signorini he is continuing: “The prospects for demand, employment and external accounts are favourable. It is necessary to take advantage of the contingent conditions in which we find ourselves (product in growth albeit gradual, current balance of payments in order, very low interest rates, very moderate risk premiums on the international financial markets) to strengthen public finances, to visibly reduce the debt , our perennial factor of weakness; to lay the foundations for sustainable development".
In particular, "fiscal policy must move along a narrow path between the need not to stifle the economic recovery and the imperative to reduce the debt - he continued - At the moment the path, albeit still arduous, is a bit ' less cramped than in the past, thanks to the favorable economic and market conditions”.
And right now "the significant reduction in the ratio between public debt and GDP in the medium term is within our reach, as shown by both our analyzes and those of the government - concluded Signorini - Lower primary surpluses can give temporary benefits to growth , but usually accompanied by a slower reduction of debt, therefore, they expose the country to market volatility for longer; risk jeopardizing future growth. Primary surpluses slightly below those planned in April may be manageable, provided that the actions needed to achieve the medium-term objectives are clearly defined and implemented without any uncertainty. It's the bare minimum. The credibility of the commitment to ensure public finances in order is a necessary condition so that a gradual return to normality of monetary and financial conditions in the euro area does not imply an increase in the differential between the cost of debt and economic growth, which in turn would result, like a vicious circle, in a worsening of the dynamics of the debt”.
Attachments: Signorini hearing
