Next with a dose of genuine commitment and a little ‘to claim that everything is under control, both in Rome and in Brussels. Next in the idea that in October, when once again everything will be questioned, Europe will be different. Too fragile at that point, too preoccupied by other problems or even become too insecure to take care of his old recipes of Italian debt that falls. In fact, probably this year salt.
After the decibels of the controversy, the Document of economics and finance launched yesterday by the government shows that in Italy and the Commission there is no desire for conflict. Even at the cost of some tightening of the budget lives in Rome and to have recourse, in Brussels, to a certain indulgence on the underlying trends of public finance. It would not be difficult to actually identify the weaknesses in the infrastructure presented yesterday by the government, and its architects know. But even in the EU Commission a growing number of traders believe that this is not the time to ask for more.
on the merits, various factors make us suspect that the real Italy accounts in 2016 and 2017 will be different from those presented yesterday in Def . The document announced already this year a slight decline in the debt relative to the size of the economy. It would be the first turnaround since 2008, yet the assumptions on which this scenario is based remain deeply uncertain. They are for example those on expected privatization proceeds: Def in the government expects to collect eight billion over the next eight months, but sell another 30% of Poste could fruttarne at most three, and the supply of properties and a share ENAV , the organization of flight support, just another billion. For the moment there is not much else to sell.
A second reason of merit raises doubts about the decline of debt in 2016. Because falls in national income (GDP ), it is necessary that the financial volume of the latter thereby be increased by a certain type of inflation; it is of a particular price index, which includes factors such as the exported goods. Last year this inflation was a bit ‘higher thanks to the fall of the euro, but in 2016 and is likely to be zero or below zero, unless the euro will not collapse for another 25%. If you do not happen, it is likely that in 2016 the debt to rise. The only way to avoid it would be another tight budget – cuts or new taxes – that the government has already ruled out as “counterproductive”.
As for the deficit, between Rome and Brussels everything is played in a mix of compromises and referrals . The government agrees to the filing of three billion deficit this year, while fixed for the next objective was affected some questions. To center the official deficit target of 1.8% of GDP in 2017, also confirming a cut of business rates but avoiding a VAT increase from 15 billion to be paid by consumers, the route is difficult. In October, the government is expected to present in spending cuts or new taxes Stability Law for at least 22 billion, in theory.
In practice, it seems likely that in autumn Italy try to renegotiate once once its fiscal targets . The hope is that by then even the ideas in Brussels have changed a bit ‘. The Italian deficit fell from 5.3% of GDP in 2009 to make up between 2% and 3% in recent years, but there seems likely to remain for now. The debt perhaps fatigue will stabilize, but could only go down if it came a robust recovery. In the event of another recession, the entire balance would return dangerously at stake.
Net of disputes over the “fiscal compact” clauses, is this is the basic structure from which the government is preparing to re-discuss all with the EU Commission in autumn. It will offer a few reforms and concessions, but will ask new budgetary margins and this will not be alone. France is preparing to do so in view of the presidential election in 2017; Also next week the IMF will propose tax cuts and public investment in the West that counter the threat of deflation. As Italy does not have much space to make, in Brussels we can only hope that action on deficits are least well spent: suitable to grow the productive system of the country, not just the poll ratings of those who sign them.
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8 April 2016 (amendment 8 April 2016 | 23:04)
© ALL RIGHTS RESERVED
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