Today, Wednesday 5 June, the European Commission will ask to open one infringement procedure against Italy for non-compliance with debt rules. After a series of technical steps, the final verdict will be up to the EU finance ministers, who will meet for theEcofin on July 9th. The procedure would impose a recovery period of at least 5 years on our country: in case of refusal, sanctions would be triggered. There are still four weeks to avoid this scenario, but Brussels' demands are strict: immediately a corrective maneuver of 3-4 billion, plus commitments to reduce the deficit by another 11 billion (0,6% of GDP) with the 2020 Budget law. This is what La Repubblica writes, anticipating a draft of the document that the Commission will send to Italy today.
According to the EU executive, the yellow-green government has breached all European accounting parameters. In 2018-2019 the deficit-GDP threshold was exceeded by 11 billion and in 2020 the ratio runs towards 3,5% which exceeds the Maastricht limit by half a point. Consequentially, the debt it rises to 132,2% of GDP in 2018, 133,7% in 2019 and 135,2% in 2020.
To date, the Italian debt lost on every citizen for 38.400 euros and financing it costs a thousand euros a year for each inhabitant. “Since mid-2018 (since the government took office, ed) the spread has increased by 100 points in six months – writes the Commission – with a cost of 2,2 billion for citizens. Its amount prevents Italy from stabilizing the economy in the event of financial crises and weighs on the living standards of future generations. The absence of prudent budgetary policies exposes the country to market confidence shocks, with a negative impact on the real economy and growth”.
Brussels then debunks the justifications provided by the government with the letter sent last Friday signed by Minister Tria. First of all, the yellow-greens attribute the drift in the accounts to the lower growth since 2018, but for the Commission it is "an explanation that only partially mitigates the failure to reduce the debt. Furthermore, it is the government's political choices that have contributed to this slowdown in GDP with a negative effect on confidence and access to credit”.
The government also blames the previous executive, but the Commission recalls last May that it called for measures to be taken "to respect budget constraints and avoid spending easing". Salvini and Di Maio chose not to proceed, accusing Brussels of having miscalculated.
As for the two flag measures of the Pentalega supporters, if citizenship income had no positive effects on GDP, it is "share 100” to have done the greatest damage: “It partially erases the positive effects of the pension reforms and weakens the sustainability of the Italian budget in the long term. It drives up pension spending, taking resources away from investment and education, hurting the workforce and potential growth." Finally, the Commission points the finger at the reforms, a front on which the yellow-greens have made "limited progress", erased by the fact of "having taken steps backwards on the main reforms adopted in past years".
