More investment and more flexibility in public spending: new economic rules are upon us for the European Union. We are not yet at the filing of the Fiscal compact, also recommended by the President of the Republic Sergio Mattarella in his message on Saturday to the Ambrosetti Forum in Cernobbio, but we are getting close.
Saturday atHelsinki Informal Ecofin, in which the new Italian Minister of the Economy will make his debut Roberto Gualtieri,European Fiscal Board (Efb), a technical body highly regarded in the community, will put the cards on the table by presenting a substantial 119-page document drawn up on a mandate from outgoing president Jean-Claude Juncker which will try to outline the reform of tax rules.
The cornerstones of the reform, as reported by an in-depth service published in the Sun 24 Hours, there are two: 1) new rules for public spending calibrated over the three-year period and anchored to the growth of each country but above all to the revival of the Golden rule, i.e. the unbundling of public investment expenditure objectives as long as they are linked to European policy priorities; 2) orpublic debt repayment objectives no longer bound by the 60% rule but modulated country by country and planned over a period of 7 years.
Albeit with all the necessary diplomatic and political precautions, if Ecofin adopts the document of theEuropean Fiscal Board, it is evident that the austerity strategy will go on file, like the rest the winds of recession that even cross Germany have been recommending for a long time.
With the new rules, the previous parameters of potential GDP, of theoutput gaps, the structural deficit and the 60% constraint on public debt to give more space to development policies, naturally without falling into laxity.
The EFB proposal, which starts from assumption of the bankruptcy of the Fiscal compat both for the purposes of debt reduction and public finance stabilization, it is designed to take greater account of the specificity of each country and each economy in order to facilitate its growth and modernization without useless straitjackets. Of great importance it is of course the revival, albeit limited, of the Golden rule which can give a boost to investments in infrastructure and digitization in a harmonious European framework.
Naturally we are in the first steps and the proposals on the table have for now a technical value while the game of the new Europe is all political but the wind of novelty brought by the president Ursula Von der Leyen can be perceived with the naked eye and bodes well.
