Wednesday, September 28, 2016

Renzi and Padoan, guns from Bratislava to St. Prudentius – The Republic

At the crucial of the update of the estimates of growth and of the trend of the public accounts, Renzi and his government have arrived with a state of increasing concern. The general framework of the economy, marked by the slowdown of world trade, is reflected on a situation in Italy that is struggling to regain momentum and continue to achieve growth rates that are halved with respect to Europe. Accept to grow in the next year below 1 percent, also in view of the deadlines in the policies of the executive, starting with the referendum, it would have been a defeat at the start. So that figure, the fixed Tuesday night in the anguished note of the update to the Def, is a sort of a line of the Piave ideal: keep it will not be easy, because already the Oecd estimate of 0.8 percent and is the condition that has the effect of the stimulus package on the companies for investment and technology, Industry 4.0, which many believe, but that is to be measured on the facts.

it is clear that in a situation such as this new dose of rigour, if not of austerity, they would have broken the legs of the convoy, the Italian tiring journey towards a ritovata normal economic and financial. No one denies that the excessive cuts killed each pick-up and the summit of Athens, a few days ago and between the mediterranean countries of the european Union has expressed the thesis that even the Imf could share. For us, on the occasion of the Def and the new "budget", it was quite simply to be able to have more margins of the budget and the deficit-to-Gdp ratio higher to overcome the obstacle of sterilization of the increase in the Vat, tearing up the old "draft" of the safeguard clause and to be able to do a bit of economic policy (pensions, consumption, investment) and the hands free.

Renzi has played its game with presence and boldness suited to the times. The cannonade began in Bratislava, 16 September, on the occasion of the european summit: hit so the punches that Merkel and Hollande keep him out of the final press conference. In compensation, said: "austerity does more harm than good", sticks to the Fiscal compact that we have introduced in the Constitution in the form of a balanced budget, remember rightly, Germany that has a trade surplus, that is inguaiando Europe. Tsipras and Stiglitz could subscribe to. And is it true, Angela Merkel, and an old fox like Juncker are convinced in the depths between populism, elections in France and Germany, new consultations in Austria, it is good that Italy did not exist as a new problem, even at the cost of a few decimal places in most of the defcit. However, there are forms and then there is so and so.

Juncker before the european Parliament, the 22nd of September, can not but recall to the Italy that has already had the flexibility to 19 billion in 2016, and that there is no flexibility bis, therefore it can replicate. Padoan knows and specifies that there is a request in this sense, however, in the heat of the Italian players it is difficult to distinguish the road technique that you want to cover, even you come to think that the government wants to put the Eu facing a fait accompli and force independently, the defcit to 2.4 or 2.5 percent. Anyway, the ice-cold shower of Junker complicates the games, because you have to find alternative ways: so much so that in those time there he begins to worry about the consequences of a lack of flexibility: a sting in the Vat or a manoeuvre fierce.

Between the stress and sweaty the negotiation remained open until yesterday evening. Significant that a few minutes before 21, now set for the beginning of the council of ministers, sources in Brussels were a sort of ultimatum to Italy: put the amount of money that you want, but not vendetela as the result of a negotiation. So Italy has had to withdraw due to the increase of the ratio of deficit-to-Gdp ratio at 2.3-2.4% by entering the round number in the official table of the Def that goes to Parliament. It is, however, found a solution, the byzantine and the taste of the political: the number will be a realistic and more robust 2 percent (a 0.2 in more due to the fact that the tendency to 2017 salt from 1.4 to 1.6 for the economic slowdown). This 2 you add the 0.4 extra-deficiency due to the dolorse situations of migrants and of the earthquake, approximately 6.4 billion. But the extra deficit is contingent: the "compromise" will have to be approved by Parliament and from Brussels. There are no new negotiations and a new arm of iron, also because the Commission will want to understand the extent of the costs of the earthquake and migrants, as was the case last year, the address is to grant the "discount" only for the increase of expenditure, and not for the entire stock.

the outcome of The trattattiva is not indifferent, because already today, taking for granted the approval of 2.4 percent, the maneuver real, between cuts and new revenue, is likely to reach 10 billion. If, unfortunately, there was one stop and we were forced to 2, the maneuver would increase. It is obvious that everyone is now considered old-fashioned the old stability Pact, and especially the muzzle inserted with the Fiscal compact. We "we respect the rules even if you don’t share it", as he said the presidiente of the Council in the press conference. And, in fact, it is precisely those rules that have the facility to maximum the trick of the extra deficit of 0.4 beyond which the minister of Economy Padoan can still boast a formal commitment of Italy to contain the deficit at 2 percent. And, above all, at least according what has been said in the press conference, and are awaiting confirmation from the complete tables, the path to a balanced budget remains confirmed to 2019 and the structural deficit is expected to remain with the plus sign. After the guns of Bratislava has prevailed in St. Prudentius, also if Pier Carlo Padoan must have had yesterday a day very tiring.

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