EU: “Italian public debt too high.” The MEF replies: “No risk in the short term” – The Messenger

Although in 2016 the debt / GDP ratio should slightly Italian to 132.2% of GDP against 133% in 2015 and more significantly in 2017 to 130%, according to forecasts, “it remains very high constituting the most important source of vulnerability for the Italian economy.” He says the European Commission in its report on public finances in the EU. “The high public debt limits the economy’s capacity to react to economic shocks and leaves it vulnerable to possible increases in sovereign yields while also limits the space for productive public spending due to the considerable ‘counted the interests of 4.3 % of GDP in 2015 “.

” Based on the analysis of debt sustainability risks for Italy are high in the medium term due to the high public debt to 2026 (year to which they are made economic projections – ed) and high sensitivity to possible shock to the nominal growth and interest rates. ” According to economists in Brussels, there is 11% chance that in 2020, the debt / GDP ratio is higher than it was in 2015. The Commission considers “required a strong determination to improve the fiscal position.”

With the annual report on the state of public finances in the EU, the European Commission indicates that in Italy “requires a strong determination to improve the fiscal position to ensure compliance with the rule debt “because the dust has settled, the next few years the country has a” very high risk to sustainability. ” Hence the 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 the final judgment on the Budget Act 2016, expected for spring, but an analysis country by country and at the aggregate level (EU and euro zone) of the government financial position. The analysis of the ECFIN indicates, essentially, that in 2017 in order to respect the rule of debt Italy should resume ‘normal course of budgetary adjustment after two years of flexibility.

replication
 But Treasury sources emphasize that the sustainability report of the EU Commission “confirms once again that 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.” Moreover, “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. “

 25/01/2016 15:41:49

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