«Do Germany and France ask for more state aid? Let’s change the stability pact»- Corriere.it

Giancarlo Giorgetti, 56, does not often like to express himself outside the moments in which his institutional role as Minister of the Economy requires it. Maybe that’s why, when he does, he speaks with the urgency of one that he has accumulated for a long time and brings it all out together. Giorgetti, for example, did not at all appreciate that his colleagues from France and Germany, Bruno Le Maire and Robert Habeckhave gone to Washington discussing industrial policy as if they were the only ones to represent Europe. The Italian minister does not hide his disappointment, in a meeting with a small group of European newspapers.

Above all, however, Giorgetti does not appreciate the idea that Paris and Berlin get some relaxation restrictions on state aid to companies – just as a response to Washington’s subsidies – without rules that create a rebalancing. One of them concerns the rewriting of the fiscal rules: if the European Union authorizes more subsidies for technological transitions, observes the minister, then it should treat those expenses more leniently in the phase of controlling public deficits.

“We are surprised”

Certainly what gave Europe what Giorgetti calls a “wake up” was the wave of public aid and tax credits from the Joe Biden administration: up to two trillion dollars between the “Build Back Better”, “Chips Act” and “Inflation Reduction Act” programs. But the Franco-German reaction, with the mission of economic ministers Bruno Le Maire and Robert Habeck to Washington this week, the government in Rome did not like it. «It is an initiative of two countries, not a European initiative – Giorgetti immediately says -. We have not been informed and this does not offend us: it surprises us. Had Italy done so, this government would have been accused of being sovereign and anti-European. If the parties were reversed, we would be on trial», says the minister. Instead, he adds, “the response will obviously have to be European” and not just from two countries.

«Less rules»

The point is to figure out which answer. Here Giorgetti’s concerns are combined with a proposal: link the liberalization of subsidies with less rigid and more targeted rules also on public budgets. Otherwise, seen by the government led by Giorgia Meloni, the European balance is in danger of collapsing. «You can’t take just one piece, state aid, without discussing the rest – warns Giorgetti -. Moving in a disorderly way can blow up Europe. The European institutions and rules are in a serious situation of stress, if we begin to yield on the principles of the single market. Thus, overall, an already too complex system would no longer hold up».

More Europe (and strategic fund)

But precisely the Italian Economy Minister is not asking for less Europe for this: he is asking for more. Looking ahead, he sees the goal of a European “strategic fund” that jointly finances and manages major European industrial projects. But Giorgetti understands that this won’t be for tomorrow. Immediately he sees another possibility: treat differently in the Stability Pact, for the purposes of the deficit, public investments in the sectors on which France and Germany ask for less constraints in state aid. It is an issue that the heads of state and government of the Union will discuss at their summit on Thursday 9 February in Brussels. «If the relaxation of the constraints and the derogations on state aid continue and at the end of the year the rules of the Stability Pact come back into force, then a misalignment is created – observes Giorgetti -. Because then concretely I could not provide aid, even using the funds borrowed from the National Recovery Plan (Pnrr, ed), because in any case I would have to respect the budget constraints».

Italy’s proposal

Hence Italy’s proposal: “It would be an enormous step forward – says the minister – whether in the Stability Pact these investment expenditures had a different treatment than current expenditures for personnel or pensions». Also because, adds Giorgetti with another jab in Berlin, “we find it hard to accept that there are countries in series A and countries in series C”. The right-wing Italian government, which succeeded Mario Draghi’s, however remains very careful on one point: not to give the impression of being a remake of the yellow-green sovereign government of 2018-2019, which immediately entered a collision course with the markets and then with the European Commission.

“Italy does not shirk responsibility”

“Italy does not shirk the responsibility of conducting responsible and prudent public finances – says Giorgetti -. We realize that we have a high public debt, we believe we can manage it and we have a duty not to create problems for others”. Here comes a punctilious claim from the minister: “I think the latest budget law has demonstrated” Italy’s seriousness, he says. In particular, Giorgetti recalls that the Meloni government has chosen not to renew the suspension of excise duties on fuel, risking serious problems with public opinion. “It was a non-trivial political act.”

Objective: flexibility

Giorgetti knows, however, that the government plays a lot, a lot, on the redesign and implementation of the Pnrr. A first objective, now within reach, is to obtain «flexibility» on contents and times in the plan: «During the first year (of Pnrr, ed) we have been hit by the consequences of the war in Ukraine – observes the minister – perhaps it makes sense to revise the 2026 deadline by at least a year». Then there is the issue of increased costs for the works, more relevant for Italy because it received the most important part of the Recovery funds. But above all the problem of the quality of some projects and tenders that have gone deserted, such as those on hydrogen refueling stations. «Go and see the projects financed by Italian municipalities with Pnrr money and ask yourself if they can help the economy and grow. In the supplementary fund there is also a stadium», lashed the minister (not without a dig at the plans of the Florence administration on the Franchi di Campo di Marte).

Italy will not ask for further loans

Therefore, the revision of the plan, currently underway, will try to develop the industrial verticals, above all in the energy sector. Meloni often speaks of Italy’s role as a hub in the Mediterranean. «Let’s assume that thanks to the sun, the wind from the Mediterranean and thanks to Africa, we can bring all the energy from the south to the north. Do we have the capacity to transmit this energy from southern Italy to the north and towards Europe?» asks the minister. The reference to electricity grid and gas pipeline projects from South to North is evident. Certainly, however, Italy will not ask for other loans, in the approximately one hundred billion still available in Brussels, until it has the certainty of being able to spend the funds already available and (possibly) the new ones well.

A call from Giorgia Meloni rings on Giorgetti’s cell phone. The minister does not answer and continues to speak. Sounds like someone who needs to let off some steam after accumulating for too long.

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