The Def construction site is not closed yet, but there are only a few hours to go. This evening the new Economic and Financial Document will obtain the go-ahead from the Council of Ministers, convened for 18 pm. The text will include the general lines of the spending review: the main cuts will concern the salaries of public managers, the cost of purchasing goods and services, the expenses of the ministries (including Defense and Health, but linear cuts should not arrive on the second), transfers to companies and various entities considered useless, which will be cancelled. The government's scissors focus in particular on entities with duplication of functions (as in the case of the Motorizzazione Civile-Aci couple) and on those in which links with politics have multiplied waste (as happened in many municipal companies).
SALARIES OF MANAGERS
The ceiling on the salaries of public executives and unlisted companies controlled by the Treasury will go from 311 to 239 thousand euros per year, i.e. the salary due to the President of the Republic. A greater articulation of the variable part linked to the results will be envisaged. The positions of the managers should be temporary. The reform will be presented with a legal provision between the end of April and the beginning of May.
IRPEF AND IRAP
The 80 euros in payroll for those who earn up to 25 euros gross per year will arrive as expected from the increase in personal income tax deductions. However, the Government would also like to intervene in favor of the incompetent, i.e. those who earn less than 8 euros gross a year and who therefore would not obtain any benefit from the Irpef relief, because they are already exempt from paying the tax. For businesses there will instead be a cut in IRAP of 5% this year and 10% from 2015, which will be financed with the increase from 20 to 26% of the tax on financial income (excluding bots) from mid-2014 .
PAYABLES PAYABLES
Another 10-15 billion will be added to the 47 already allocated for the payment of public administration debts. A mechanism is also on the way to prevent further delays in the payment of invoices, in compliance with the European directive which sets the maximum time for payment at 60 or 30 days, depending on the case. Cassa Depositi e Prestiti will contribute by purchasing corporate loans from banks and financial intermediaries.
PRIVATIZATIONS
From the privatizations, the Government aims to obtain 12 billion euros this year. Between 2015 and 2017, on the other hand, a revenue of 10-12 billion euros a year is expected (0,7% of GDP). The plan will also cover the former municipal companies.
GREAT WORKS
The obligation to allocate at least 0,3% of GDP (about 4,8 billion) to major works will appear in the Def. The Deputy Minister of Infrastructure, Riccardo Nencini, believes that we can reach 18-20 billion over the three-year period. At least three billion will be allocated for the high-speed railway between Naples and Bari. As for local infrastructures, the Municipalities that have completed the authorization process will be able to open construction sites without the expenditure being calculated for the purposes of compliance with the internal Stability Pact . Also on the way is the reform of the CIPE (Interministerial Committee for Economic Planning) and of the procurement code to speed up procedures, as well as Title V of the Constitution to overcome local vetoes.
ABOLITION OF THE CHAMBERS OF COMMERCE
The Prime Minister insistently asks the Treasury that the Def also contain the substantial abolition of the Chambers of Commerce. As secretary of the Democratic Party, Renzi had already proposed eliminating the obligation to register with the Chambers of Commerce and attributing their functions to municipalities and ministries. The goal would be to avoid a series of formalities and costs for companies, considering that the registration fee varies from 88 to 30-40 thousand depending on the size of the company.
2014 ACCOUNTS: GDP +0,8%, DEFICIT AT 2,6%
The Def will also contain the Government's new macroeconomic forecasts: estimates speak of a 2014% growth in 0,8 GDP (against the +0,7% expected by Brussels and the +1,1% calculated last year from the previous Executive) and a deficit-GDP ratio of 2,6%, which will drop to 2015% in 1,8. For the moment, the government does not intend to use the 0,4% margin that separates the Italian deficit from the 3% ceiling set by the Maastricht agreements. Rather, the intention is to ask for greater flexibility in the coming months as regards the debt repayment path, but the game will get underway in July, when Italy's six-month presidency of the European Union will begin.
