EU: Italian debt “high risk” in the medium term. The MEF replies: “Sustainable Finance” – Il Sole 24 Ore

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This article was published on 25 January 2016 at 15:45.
The last change is the January 25, 2016 at 18:42.

To Italy “risks seem to be high in the medium term from the perspective of analysis debt sustainability, following a high level of debt at the end of the projections ‘in 2026 and’ high sensitivity to possible shocks to the nominal growth and interest rates. ” So the report of the EU Commission on the sustainability of public finances. With the annual report on the state of public finances in the EU, the European Commission indicates that in Italy “requires strong determination to improve the fiscal position to ensure respect for the rule of debt” because the dust has settled in the coming years the country It has a “very high risk to sustainability.”

From this an indication of a structural primary balance of about 4% (precisely 3.8%) in the period 2017-2026 “significantly higher” (1.3%) than expected for 2017. The report released today is not the expected judgment on the Budget Law 2016, expected in the spring, but an analysis country by country and at the aggregate level (EU and euro zone) of the government financial position. The analysis of DG Ecofin indicates, essentially, that in 2017 in order to respect the rule of debt Italy should resume the “race” of budgetary normal after two years of flexibility.

Sources MEF: no risks Italy, from 2016 down debt
A return replication MEF, for which the sustainability report of the EU Commission “confirms once Once the Italian public finances not pose a risk in the short term and are by far the most sustainable of all in the long term. ” The sources point out the Treasury, noting that “the heavy public debt makes the country more vulnerable in the event of external shocks,” why Italy is ranked on this front, “high-risk. For this the government – it is stressed – has scheduled in 2016 the debt down for the first time in eight years. ”

EU: high risks of Italian debt in the medium term
In the two pages of the European report on the Italian situation does not refer either to the Italian demands for maximum of flexibility in the public accounts of reforms, investments and expenses for the immigration crisis, nor to the specific contents of the Budget 2016, which the Commission will decide in the spring. But an analysis of the sustainability of national public finances can be distilled some consequences, at least analytically. And the first indication that it is precisely that by 2017, to meet the debt rule prescribing to reduce it steadily and according to certain parameters, the structural primary surplus would be higher than expected.

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