Here is the letter to Italy EU: yes to flexibility from 13.5 billion in exchange for commitments on 2017 – Il Sole 24 Ore

BRUSSELS – Confirming the rumors in recent days, the European Commission sent last night to the Economy Ministry in Rome waiting for a letter outlining a possible compromise on the assessment of Italian public accounts. In essence, the EU executive says he is ready to grant the budgetary flexibility sought by Renzi Government in the Budget 2016 (around 0.85% of GDP), however, in exchange for clear and credible commitments in terms of state finances in
2017. the letter – which should be the response of the Minister Pier Carlo Padoan – confirms that the Commission vice-President Valdis Dombrovskis, and the Commissioner for monetary Affairs Pierre Moscovici are ready to grant flexibility: 0.50% of the GDP with regard to economic reforms, by 0.25% in relation to infrastructure investments, 0.04% for the costs related to the management of the refugee crisis and 0.06% for the costs due to the emergency safety.

Fisco, Padoan: ok to drop in taxes, but do not rush into

In the letter, the two politicians took note of the Italian difficulty in reducing public debt (always above 130 % of GDP), given the deflationary situation and are ready “to take them into account” in their assessment of the Italian accounts. However, in exchange for the granting of flexibility and in light of the high Italian debt, the European Commission wants a commitment by Italy “clear and credible” regarding 2017. The
stance is dictated – in addition to the debt that according to Brussels will not fall between 2015 and 2016 – also from a deficit in 2017 that while Italy will be 1.8% of GDP, the EU executive is expected next year to 1 , 9% of GDP. At the same time, the Commission also wants assurances structural adjustment of 2017. In this sense, Brussels warns that the planned increase in VAT will not be deleted without compensatory measures.

” the Commission wants to be part of Italy a clear and credible commitment for 2017 “

Valdis Dombrovskis and Pierre Moscovici

the Commission’s objective is to avoid the Italian public accounts of 2017 a significant deviation from the objective of break-even. The letter arrived yesterday in Rome is the result of intense diplomatic work, just to find a compromise between the need to comply with the fiscal rules and the importance of supporting the economy. Except surprises, and waiting for the reply from the missive, Brussels tomorrow will release its judgment on the Italian accounts, as well as the annual recommendations-country.

“Europe – said the President of the Council Matteo Renzi in Bari- at ​​this time we recognize a further element of flexibility. It’s still less than what I would have liked but it is an important fact, an acknowledgment to the entire country. We got a significant agreement, important. It is not the solution to all ills but affirms a principle: the flexibility Europe there. ”

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