"The government confirms its commitment to maintaining public finance balances within the amount indicated in the programming document, respecting the parliamentary authorisations. In particular, the deficit level at 2,4% of GDP for 2019 will be considered an insurmountable limit”. This is what we read in the letter sent to Brussels on Tuesday by the Minister of the Treasury, Giovanni Tria. The European Commission had asked Italy to modify the balances of the Budget Law, which do not comply with EU rules. Faced with Italy's refusal, it is now obvious that on 21 November Europe will start the process which between December and January will lead to the opening of a infringement procedure against our country for non-compliance with the rules on debt relief.
“Although introducing innovative support measures and an easing of restrictions for retirement – continues Tria – the fiscal expansion decided by the government remains limited to the extent strictly necessary to counteract the slowdown in the economic cycle. The government believes that the reasons for setting up the maneuver retain all their validity even after having carefully evaluated” the EU findings.
However, "to accelerate the reduction of the debt/GDP ratio and protect it from the risk of possible macroeconomic shocks, the government has decided to raise the target of 1% of GDP for 2019 to privatization of public assets. Collections constitute a safety margin" and will make it possible to achieve a more marked decline in the debt-GDP ratio of 0,3 points this year, 1,7 in 2019, 1,9 in 2020, 1,4 in 2021 bringing the ratio from 131,2% in 2017 to 126,0 in 2021".
as to growth, “the government remains confident in the possibility of achieving the objectives: the maneuver was constructed on the basis of the trend framework, and does not take into account the planned growth. This prudent approach introduces a buffer into the budget law, which prevents a deterioration of budget balances even if the growth objectives are not fully achieved".
THE EU'S RESPONSE
Harsh comment from the German chancellor, Angela Merkel: “Italy is a founding country, it has decided with all the other states rules that are now the legal basis of the Union, we can't simply say now someone says that this is no longer of interest. It is not up to me to say anything else about Italy, now it is the European Commission that is playing an important role and it is important that a solution is reached. And that it is done in the dialogue with the Italian authorities, this was also said by the Italian premier Conte ".
“The Italian government's plans are counterproductive for the Italian economy itself, and now the interest rates on sovereign debt are one and a half times higher than a year ago”: thus the vice president of the EU Commission, Valdis Dombroivskis, in a tweet that resumes his interview yesterday on the Latvian portal Delphi. The effects of the spread “are evident in the availability and cost of credit to the real economy, for businesses and citizens.
During the day, Austria and the Netherlands also intervened peremptorily. "More than ever we must demand discipline from Rome, it is not just an Italian question, but a European question," said the finance minister of Vienna, the popular Hartmut Loeger, according to which "Italy runs the risk of slipping towards a Greek scenario".
The Dutch Finance Minister also shares the same opinion, Wopke Hoekstra: “It is hardly surprising but very disappointing that Italy has not revised its budget. Italy's public finances are out of control and the Italian government's plans do not lead to robust economic growth,” she said. “This budget does not meet the agreements we have made in Europe. I have great concerns about this", continues the minister, "it is now up to the European Commission to take further measures".
(Last update at 17.10am on November 14th).
