The EU confirms the soft line, assessment of the Italian debt in November – The Republic

MILAN – The European Commission confirms the soft line towards Italy and other countries, such as Spain and Portugal, from the early correspondence between Economy Minister Pier Carlo Padoan, and the commissioners in Brussels. In giving his judgment on the budgets of member states and request them how to improve them, Europe stresses that Italy, with Belgium and Finland, respect the Stability Pact regarding the debt but leads to a new assessment in November on the topic , “when more information on the resumption of the adjustment path towards the medium-term objective for 2017 will be available. the Commissioner Pierre Moscovici explained in a press conference that at the time were not detected either the elements necessary to open a procedure against Italy on the issue of the debt, estimated at 132.7% of GDP for this year. He then dedicated ample space to tell the discussions with Rome in terms of flexibility: “We had a clear commitment, wrote that Italy does not sforerà from deficit / GDP limit to 1.8% for next year” has said. “On this basis, we decided that Italy can benefit from the flexibility required for this year. Only when we receive the budget proposal for 2017 (the next Stability), in October, we will make a new analysis of its compliance with the rules debt: we are very careful, but also reassured by what the minister has guaranteed Padoan. “
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Flexibility for 2016 and commitments for 2017. according to the expectations of the eve, then, Italy collects the substantial acceptance of requests for flexibility with respect to 2016 and a reduction of effort – that nonetheless remain – to put in the next law Stability. This year, in essence, Italy will help correct the public accounts for 0.85% of GDP: it means not having to recover 14 billion in austerity maneuvers. In 2016, therefore, Rome can keep the deficit at 2.3% of the product, correcting only a small part compared to 2.6% in 2015. Clause of investments and reforms, expenses for migrants and anti-terrorism: a bit ‘ all chapters of flexibility cited by Renzi-Padoan tandem have been upheld.

next year the cut will be sharper, but again without vertical collapses: the goal is 2017 to 1, 8%, from 1.1% theoretical, with a total savings of 26 billion over two years. In letters occurred between the holder of the Italian Treasury and the EU representatives, Dombrovskis and Moscovici, Brussels has identified a potential deviation between 0.15 and 0.2% of GDP between the Italian government forecasts and those of the Commission. In the texts it puts on paper that there must be a commitment that does not happen, and Padoan has ensured that this promise will be confirmed in the next Budget. A text still to be built, so that it can not be said that the EU has come a mandatory requirement but rather a request to not pull the rope too, especially not to alter the penalty takers countries, and the establishment of some stakes in which to move . For the stability of the autumn, however, the government has already run chase to twenty billion resources necessary to sterilize the VAT increase of safeguard clauses and the funding of promised tax cuts.

The recommendations in detail. In on Italy specific document, the Commission sets out five recommendations. First, remember the numbers of the flexibility afforded: admits a deviation from the targets of 0.75% of GDP for investment and reforms and opens up additional flexibility of 0,1% of GDP linked to the costs for migrants ( 0.04) and for the safety seat (0,06). However, it requests that progress is made in 2017, correcting the deficit by 0.6 percentage points of the product (about 10 billion). The indicated highways are privatizations, debt reduction, the shifting of taxes from inputs to consumption and property, the reduction of tax benefits, the completion of the land registry reform, the fight against tax evasion. On the second point indicates the reform of Pa and civil justice, the third reduction in the amount of suffering in the belly of Italian banks. Finally, the completion of the labor reform with active policies and anti-poverty plan, and the rapid adoption of the law on competition times.

Weather forecast for Italy to face: EU Commission winter, spring
(latest) and Def 2016

	2015	2016			2017
	prim EU.	EU winter	Def 2016 (cons)	prim EU.	EU winter	Def 2016	EU prim.	EU winter	Def 2016
GDP % annual growth	0.8	0.8	0.8	1.1	1.4	1.2	1.3	1.3	1.4
annual inflation	0.1	0.1	0.1	0.2	0.3	0.2	1.4	1.8	1.5
unempl rate.	11.9	11.9	11.9	11.4	11.4	11.4	11.2	11.3	10.9
Deficit / GDP (%)	-2 , 6	2.6	2.6	2.4	-2.5	2.3	1.9	1.5	1.8
Debt / GDP (%)	132.7	132.8	132.7	132.7	132.4	132.4	131.8	130.6	130.9

Something similar to that done for Italy was extended to Spain and Portugal , which are under the lens for the deficit: aided by the policy framework (Madrid will go to elections in June and today has broken through the debt ceiling over 100% of GDP), it was decided to indicate them to reduce the deficit, but for an accurate analysis will expect early July. The European Commission also recommended that the Council “to close the procedure for cylinder engine deficits for Cyprus, Ireland and Slovenia , since these countries have brought their deficits below the 3% of GDP in 2015 and that the correction is expected to be durable.