“The Government is launching a new spending review and we believe it will be possible reduce expenditure projections for new welfare policies in the period 2020-2022″. The Minister of Economy, Giovanni Tria writes it in the response letter sent to the European Commission.
Which "welfare policies" the minister refers to is explained in another part of the text: citizenship income and 100 share.
The reply from the Deputy Prime Minister was immediate Luigi Di Maio, who does not want to hear about possible cuts to the two standard government measures. “The letter prepared by Minister Tria with the League? The M5s knows nothing about it, we didn't take care of it, it wasn't shared with us. Surely we do not cut social expenses, nor income nor the 100 quota ". In the end, the cuts remained out of the letter sent by the Government to Brussels.
Returning to the letter, Tria also reassuressoaring spread on ten-year bonds, but above all on five-year BTPs, whose yield today surpassed that of Greece: “Furthermore, we are convinced that once the budget plan is finalized in agreement with the European Commission, yields on Italian government bonds will decrease and projections relating to interest expenditure will revised downwards”, continues Tria in the letter.
The Minister of Economy for the moment it closes the doors to a possible increase in VAT, although it does not give precise indications as to how it will be avoided. “In line with existing legislation, the stability program foresees an increase in indirect taxes of almost 1,3 percent of GDP, which would take effect in January 2020. Political parties have expressed reservations about the planned increase of VAT, but we still have a range of alternative measures to guarantee the aforementioned structural improvement”, writes the number one of the Mef.
References also to flat tax. "Parliament has invited the Government to reform the personal income tax, without prejudice to the deficit reduction objectives for the period 2020-2022, by reducing the number of brackets and the tax burden on the middle class", it is said read in the letter. “There will also be a review of tax credits and exemptions.”
Tria's words aim to reassure Brussels on the stability of Italian public finances and on compliance with the rules. Too bad that at the same time Lega and 5 Stars insist on the Flat Tax, a very expensive measure, which according to them will have to be financed in deficit. An intention which, if implemented, would certainly go in the opposite direction to the requests of the EU Commission.
"The flat tax is the first reform that the government and Parliament will have to discuss", said Deputy Prime Minister Matteo Salvini today, May 30, also receiving the first Yes from the 5 Star Movement, which until today had declared itself strongly against the measure .
“We are in favor of the League's proposal to finance the flat tax in deficit. All the more reason if, as we learn, Tria already shares this idea: the 15% tax regime for incomes up to 65.000 euros is welcome”, said parliamentary sources of the party led by Luigi Di Maio.
The Premier Conte is cautious: "I am not discussing now in front of journalists how the flat tax will be implemented: a flat tax project has not yet arrived at Palazzo Chigi".
