Fourteen billion deficit to finance the next budget maneuver. Enough to cover both the cut in the contribution wedge for incomes up to 35 thousand euros, start the Irpef reform with the merging of the first two rates and finance the renewal of public contracts. A maneuver, the one outlined by Nadef approved yesterday by the government, “anti-cyclical”, as underlined by the Minister of Economy Giancarlo Giorgetti.
All this while still trying to keep the debt under control, which will fall next year to 140.1 percent compared to the 141.4 percent forecast in April (then it will fall again to 139.6 percent in 2026 against a previous forecast that saw 138 percent). Despite the deficit which will be allowed to rise to 4.3 percent next year, compared to 3.6 percent under current legislation, the government’s fiscal policy remains “prudent” overall. But the path that until a few days ago seemed decidedly narrow to contain the government’s measures has now widened. Giorgia Meloni expressed satisfaction «We are working», she said, «to write an economic maneuver in the name of seriousness and common sense. And that we keep the commitments we have made to the Italians: enough with the waste of the past, all available resources will be allocated to supporting the lowest incomes, cutting taxes and helping families.” The Minister of Economy, Giancarlo Giorgetti, defended the government’s decision to “exceed” the 3 percent deficit limit. Nadef’s text was immediately sent to the Commission.
How will the EU take it? “They will understand the situation,” Giorgetti said, “as all my fellow European finance ministers who manage a situation of economic slowdown understand it.” Moreover, the minister added, referring to the ECB’s rate tightening and the war in Ukraine, we are in a condition that «does not allow us to make pro-cyclical policies. But the deficit bar”, he added, “has been set at an absolutely reasonable level”.
However, given the greater deficit, the spending review will be strengthened. Spending cuts will rise to 2 billion. If the ministers do not save as much as expected, the Treasury will directly take care of lowering the scissors on the budgets. And there will also be privatizations. Giorgetti, referring to the sale of the MPS package to the Treasury, explained that «the objective is to implement industrial policy. MPS”, said the minister, “can become a lever to build a strong banking hub, we don’t need to raise cash immediately, hence the assessments that the Ministry of Economy will make”. The “Maroni bonus” will also return, the incentive for those who can retire but instead decide to continue working. He will receive in his paycheck the contributions he should have paid to INPS. As already decided in the case of Quota 103, where however it took nine months to obtain the green light from the Social Security Institute. For the rest, Nadef takes note of the slowdown in the economy. Gross domestic product this year will not go beyond 0.8 percent. Next year it will rise by 1.2 percent (against the 1.5 expected in April) thanks to government measures without which it would instead stop at 1 percent. The deficit, also for 2023, instead “explodes” rising to 5.3 percent, before falling back to 4.3 percent in 2024. The fault, says the government, is of the Superbonus.
THE IMPACT
The 110 percent will have a negative impact on public finances. In his absence, Palazzo Chigi sources have leaked, the debt would have fallen by one percentage point per year. The building bonuses, therefore, entail, as the same sources explained, a substantial increase in public needs over the course of the entire legislature, reducing the room for maneuver to finance interventions in favor of the real economy and families. A Superbonus which in the meantime is moving towards definitive archiving. Yesterday, all the amendments to the “asset” decree which proposed an extension for the works financed at 110 percent were rejected. At least for now, therefore, the deadline for completing the construction sites remains December 31st. The unemployment rate is also expected to decline from 7.6 percent in 2023 to 7.3 percent in 2024.
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