EU: Italy accounts for risks from high debt and banks – ANSA.it

For the moment, the Italian public finances but keep the bad debts may have put them at risk in the coming months, given the high public debt which places Italy among the countries at risk in the medium term. And if the pension reform has made the country safe for the future, it is the crux of the respect of the rule of the EU debt: for this you need a “strong determination to improve the fiscal position.” For the reduction of the debt and avoid a procedure, in fact, the primary surplus should be at least 2.5% -3.8% over a period of ten years, an effort “extremely ambitious”, if not impossible, that so far very few of the 28 have been able to do. And ‘the analysis that emerges from the report in 2015 on the sustainability of public finances of the European Commission, which according to the MEF instead “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 the long term”.

And the Italian debt, ensure from Viale XX Settembre, it will come down already this year. The study of Brussels, in fact, said the deputy economy minister Enrico Morando, “says what we already know, namely that we must reverse the trend in the debt” urging “not to exaggerate”. Experts in Brussels are optimistic about 2016 and not seen for Italy “stress” on the accounts. But, they warn, “the share of non-performing loans in the banking sector could be a major source of risk of short-term liabilities”. The alarm is triggered by the Commission on the debt in fact from 2017: “the risks appear to be high in the medium term”, where Italy with 133% ratio with the GDP for 2015 is particularly exposed to “high sensitivity to possible shock to the nominal growth and interest rates. ” In short, a new recovery will or another crisis spread and Italian accounts would end easily derailed, with a “11% chance that the Italian debt in 2020 is greater than in 2015″.

And under normal economic conditions as the current to bring down the debt to 110% in 2026 however it takes a constant structural surplus of 2.5% – as demanded by Brussels in 2017, but actually gave 1.9% from the autumn forecast – and unchanged until 2026. In fact, “if it were respected convergence of structural balance towards the medium-term objectives” and even “in line with the fiscal adjustment” indicated in the Communication on flexibility, the primary surplus should be even 3.8%. A trend for the Commission itself “relatively high to maintain for 10 years”: only 1% among the 28 has ever succeeded in such an undertaking. In addition to Italy there are 10 countries (Belgium, Ireland, Spain, France, Finland, Great Britain, Portugal, Slovenia, Romania and Croatia) “high risk” in the medium term. Italy and Spain, however, are the only ones in which pension costs have a “mitigating effect” on the efforts of adjustment. Provided, however, the adopted reforms are “fully” apply. Italian debt was over in November under the lens of Brussels, in the procedure for excessive macroeconomic imbalances, which will arrive in late February reports country by country while earlier this month are expected in the new economic forecast. And, later, the decision on all the flexibility (reforms, investments, migrants) asked from Rome.