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Maneuver, Renzi: "Neither health care cuts nor cigarette tax". But the VAT is scary

The Premier assures that the Stability law will not contain any tax increases, not even on cigarettes - Growth lower than expected, however, reduces spending margins and the safeguard clauses must be defused: 15 billion are needed to avoid the VAT increase

Maneuver, Renzi: "Neither health care cuts nor cigarette tax". But the VAT is scary

"In 2017, the money for health care will increase and there will be no interventions on cigarette packets”. With these words, the Prime Minister, Matteo Renzi, “categorically” denied to the microphones of Unomattina the news published today by La Repubblica.

According to the newspaper, in order to balance the accounts of the new Stability Law, Treasury Minister Pier Carlo Padoan would have asked cuts in healthcare for 1-1,7 billion euros (the National Health Fund would have remained substantially stable at 111 billion, without rising to 113 as envisaged by the latest Def), a tightening that would naturally have met with the opposition of Beatrice Lorenzin.

The proposal for a compensatory measure would therefore have arrived from the Minister of Health: a penny tax on each cigarette to recover 700 million to turn over to the health service for the purchase of anticancer drugs. Again according to the reconstruction of La Repubblica, the Treasury would not have opposed this measure.

Renzi - who clarified that he speaks "also on behalf of Minister Padoan" - assures that "this information is wrong" and reiterates that the Government does not intend to increase the tax burden: "The time is over when politicians considered citizens an ATM , they were unable to cover the expenses and put a tax – said the Premier -. With me prime minister, neither taxes nor excise duties will increase, not even on cigarettes".

As for health, the Premier recalled that in 2013 the National Health Fund “was 106 billion in 2013 and will continue to grow. Of course, the Minister of Health always asks for ten, then if he gets one it's not that he's had a cut, he's had one. When we talk about cuts we are not talking about reductions compared to the past, but about cuts on the requests of the ministries ".

However, the spending review remains a necessity that the Government must deal with. As Padoan admitted, the update of the Economic and Financial Document that the Executive will present to the Chambers by 20 September will contain a downward revision of the growth estimates for 2016. And if the GDP increases less than expected, the deficit-GDP ratio rises – from the expected 1,8% it could reach 2% or a little more - by reducing the spending margins granted by Europe. The lack of growth amounts to about five billion euros, therefore the budget, the value of which should be around 25 billion, will have to be less generous than the Government would have liked (especially in view of the referendum on the constitutional reform).

The problem will not be the two billion for the pension interventions, from the extension of the fourteenth month to the Ape, even if the cost of the latter measure could rise in the event of an extension to early workers, as the unions request. It doesn't even scare the business package, since the Ires cut it was already foreseen in last year's manoeuvre.

The real dilemma will be finding the 15 billion needed to defuse the safeguard clauses who threaten to pick up the VAT rates in 2017 from 10 to 12% and from 22 to 24%. About half of these resources should be covered with the greater flexibility already granted by Brussels for next year.

For the rest, according to Treasury calculations, from the final phase of the Spending Review 3-3,5 billion should arrive, while at least two more are expected from the new one Voluntary disclosure for the return of illegally exported capital. Work continues on the other covers. There is still plenty of month to make ends meet: the deadline for the presentation of the Stability law is 20 October.

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