Economic manoeuvre, what a mistake to postpone the real spending cuts until after the elections

It's really nice to read in this morning's Financial Times an interview with our Economy Minister Giulio Tremonti who says: “It's the end of the deficit spending era. Deficit spending is archived”. It was about time that words like these were heard, which certainly deserve the applause of all of Italy that works and produces. Contrary to what the rating agencies often seem to believe – but isn't it time to silence them in times of crisis? – and who, with them, fuels financial speculation against our country, it is true that Italy is not Greece and it is true that we are not on the eve of a repeat of 1992 when we were on the verge of bankruptcy. However, the continuous widening of the spread between the yields of German bunds and those of our government bonds is not an event to be taken lightly. And this is the key with which to read the budget maneuver that the Council of Ministers will launch today together with the enabling law for tax reform. It is right not to promise tax cuts if the reform does not come at no cost and equally right not to promise investments - often indispensable but often only superfluous - if their financial coverage is not guaranteed. Targeted spending cuts are better than linear cuts, as long as they are real cuts and not just vague promises or languid caresses.
There will be time to evaluate the individual measures of the maneuver and its overall structure, also because, as always happens in these cases, the situation is fluid and what seems certain now will no longer be so in an hour. Many measures, as we know, are announced to test the reactions of the public and the electorate, but they don't seem to become reality. However, there is a crucial point that is already clear: the absolute imbalance between the amount of interventions planned for this year (1,8 billion euros) and for 2012 (5 billion) and those - very more massive (40 billion) – planned for 2013 and 2014, i.e. for after the elections. We understand the anxieties of a premier who is in free fall in electoral consensus and who sees Tremonti's rigor as smoke screens, but in Italian the postponement of the adjustment of the accounts is called in only one way: clever. Exactly what Italy does not need, as the President of the Republic, Giorgio Napolitano, wisely pointed out from Oxford when he recalled that "there is no doubt that those who make decisions today assume responsibilities for tomorrow as well" . Well said, President.