Padoan freezes Renzi on tax cuts – the Journal

Rome – on the tax cut, Pier Carlo Padoan brakes, throwing cold water on the enthusiasm of those – including the prime minister – is pushing for a reduction Irpef early as next year. His economy minister instead shows very cautious: “We’ll see – he says – the tax cuts for businesses are already provided, if there is room to make further for families will make them. But there are budget constraints, which are very close. “

Padoan speaks for Trento, where yesterday he starred at the Festival along with the governor of the Bank of Italy, Ignazio Visco, and explains that – in the game good-cop bad cop who often and successfully leads with Renzi – “hearing about the constraints is boring, but the economy minister’s what I have to say these things, because among other things we believe.” In any case, he says, what the tax cuts in the law Stability of 2017 “is still open reasoning”.

Visco praises the government’s reforms: “In recent years in our country there was a constantly moving in the direction of change. ” But stresses that after being launched, the reforms must be operated: “That the public administration must be implemented, once designed,” as the Jobs Act ‘must function even when incentives are removed. ” Then the liquid ruthless governor the centerpiece of the propaganda Five Star, that “citizenship income” which according grillini solve every problem on earth. Too bad, says Visco, you can not do: “It would be unsustainable from a financial point of view, it would have a weight equal to 20% of GDP.” A blunder.

Both Padoan who Visco evoke the ominous unknown factor that weighs on the destiny of Europe and its economy. If he wins the Brexit, said the governor, “there will be forces that will try to follow the example of Britain, who take life by these phenomena and then bring turmoil in financial markets.” Those forces, Visco adds, “are contrasted” with policy responses. Padoan agrees, and says: “The best line of defense would be to announce, from European countries, that the European integration process goes on and gets stronger.”

On the banks, the Minister criticizes the bail-in imposed by the EU: “Ignore the risk that the damage from spreading to the system and that a healthy bank are damaged because of its proximity to the sick bank.” The government Renzi, recalls, “came when he could not do the bad bank, when the European standards did not allow it anymore.” As for the bottom of Atlas, “is an experiment that many countries are looking with interest, I have received many requests for clarification on how to function.”