“It is natural to wonder whether such unbalanced corrections on the revenue front and, therefore, so negative for growth, are not at the basis of the recurring signs of lack of confidence on the markets”. To ask the question is the president of the Court of Auditors, Luigi Giampaolino, in a hearing on the stability law in the House and Senate Budget Committees. The markets, underlined the president, are "more sensitive to the methods of implementation of the rebalancing and to development prospects than to the objective of merely zeroing the deficit".
In short, more attention to growth. Giampaolino insists on this concept, and indeed underlines that "greater attention to the elements for development would be necessary in all manoeuvres, it would have been necessary in the previous maneuvers and it would be even more necessary in the next maneuvers and also in the further conformation that Parliament will want give this law of stability”. Hence the hope that “more attention will be paid to the elements for the growth of development and not just sticking to revenue or a further reduction in expenditure, which in any case needs to be re-qualified in its entity and size. We must have regard for those who may be factors of development”. There is no time to lose: "The urgency is always there, it is always good to do quickly what needs to be done, never postpone".
Giampaolino takes the opportunity to recall that already "in examining the summer maneuver" the Court of Auditors in a hearing in the Senate had underlined how "a very delicate aspect concerned the difficult balance between the measures to rebalance public finances and the 'need, also a priority, to recover conditions and tools for a less fragile economic growth, it being clear that, for a country with a public debt stock 20 per cent higher than the GDP level, only a stable higher economic growth allows realistic return routes".
To reconcile rigor and development, measures must be put in place that "do not separate reform interventions from deficit reduction interventions", insists Luigi Giampaolino. “The conviction is strengthened in the Court that the path to follow should aim at an effective reduction of the weight of the public budget (revenue plus expenditure) on gross domestic product, so as to free up resources to increase the level of demand from 'market operators' and that, therefore, the reconciliation between rigor and development must be found within consolidation maneuvers that do not separate reform interventions from deficit reduction interventions”.
The president of the Court of Auditors also points the finger at the safeguard clause which provides for the procurement of 20 billion euros from the tax reform bill to guarantee the achievement of a balanced budget, and which risks "activating a negative spiral" . The reversal of the logic of the enabling tax-welfare reform law "from an instrument originally conceived to redistribute the tax burden more equally by also using the entire revenue from the fight against tax evasion, to an inappropriate instrument for covering the deficit correction budget" according to Giampaolino, it constitutes a "worrying sign of the obstacles, of various kinds, which prevent an adjustment of the accounts centered on the structural reduction of the level of public expenditure". The risk that one runs in this way, he concludes, is that "a negative spiral is activated, in which increasing doses of fiscal restriction are nullified by the recessive impulses that the public budget transmits to the economy".
