The budget law for 2021 is inadequate to face today's emergency and tomorrow's challenges, while the drafts of the plan on how to use the funds from the Recovery Fund "they do not appear to be effective either in terms of governance or in terms of preparing a limited number of strategic projects". The rejection comes from School of European Political Economy (Sep), the think tank of economists gathered around the Luiss University and which includes, among others, Stefano Micossi, Marcello Messori, Carlo Bastasin, Marcello Clarich, Pier Carlo Padoan, Pier Paolo Benigno, Francesco Saraceno and Gianni Toniolo .
Maneuver and plan for the Recovery Fund are interconnected interventions, because most of the resources made available to the state for next year come precisely from the 209 billion granted by Brussels to our country. But what, in detail, are the main criticalities identified by the Luiss economists?
THE BUDGET LAW
"First of all - points out the Sep report - the budget law is based on the Draft Budgetary Plan (DPB) sent to Brussels before the emergence of the second wave of the pandemic", which "changed the cards on the public finance table again".
But above all, according to the scholars of the Roman University, the weak point of the maneuver is "the indeterminacy of the contents of the two by far the most consistent and qualifying items": interventions for growth redistributive measures. In particular, "nothing has yet been established regarding the configuration that the tax reform will assume (profile of rates and deductions, family allowance), so that its real redistributive effects remain undefined", the report continues.
Furthermore, in the budget documents available so far, the Sep identifies a "danger" and a "serious error". The danger is failure to indicate the "prospective coverage of some important measures which imply permanent and non-temporary effects on public finances and, above all, among these the decontribution in the South and the Tax Reform Fund.
Instead, the error concerns “the way in which the tax advantage for the South was set up”, because “resources are concentrated on tax relief, a good 16 billion in three years and another 24-25 in the following period (on trend), instead of the tax credit for investments in the South, which is assigned two billion and for only two years. Now, the tax relief is an instrument that does not ensure that the disbursement of public resources is matched by investments by companies, unlike the tax credit, which can only be used against real investments”.
THE PLAN FOR THE RECOVERY FUND
As for the plan for the Recovery Fund, the Luiss economists underline that on this front “thick fog persists” and above all there is a lack of “a serious discussion” on the reforms to correct the structural weaknesses that have always characterized the Italian system. The indications, at the moment, are generic and the interventions are projected "in a future that is not only indefinite but unrealistic".
On the merits, "the government plays around with the idea of entrusting the formulation of projects to large investee companies - continues the document - These certainly have planning and investment capacity and could also, in some cases, play an important direct role (hydrogen, smart grids, 5G). However, the choice of the large infrastructures on which to focus or the model of the health system on which to invest in to correct the weaknesses brought to light by the pandemic crisis can only belong to the government".
Essentially, remarks Sep, “the political discussion on the reforms has never started".
