Pensions reform, Giorgetti’s fears. First test in the EU on support and one-offs – Corriere.it
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The government looking for a few billion
Mario Draghi’s government deficit target was 3.9% of gross domestic product (GDP) in 2023 and 3.3% the following year, but Meloni raised both bars: to 4.5% l next year and at 3.7% in 2024, when European fiscal rules are likely to be back in effect – albeit renewed. To tell the truth, due to the unrepeatable nature of the revenues that will come from the various amnesties being cooked, a new adjustment will be needed to bring the deficit down to 3.7% in 2024. This month the government is due to announce measures to raise a few billion in next year’s budget law. Not many (maybe four), however, coming from cuts or withdrawals.
Intact confidence in markets and Brussels
But now the substance that the confidence of the markets and of Brussels – or at least the patience – remain intact. The slight revision of the trajectory of the accounts is not frightening anyone. We are far from 2018 when, under the yellow-green government, a difference of 0.4% of GDP had seismic effects. In recent days, at the announcement of the gap, the spread between Italian and German ten-year bonds has hardly changed and remains well below the levels seen after the elections. The EU Commission should not raise a case on the goal itself, that deficit at 4.5% with a slight decline in the expected debt. Not even if it postpones the reduction to 3% by one year and therefore makes it probable in 2024 an excessive deficit procedure in Brussels on Italy and on a number of countries with balances even more in the red (among them France, Belgium, Slovenia and Slovakia).
Giorgetti’s concerns
But the calm of the markets and the EU Commission does not mean that concerns are absent. On the contrary, they remain primarily in Giancarlo Giorgetti. The Minister of Economy is well aware that in the finance document just updated by the government, the expenditure for pensions with unchanged laws (ie, in the hypothesis of a return of the stringent reform of Elsa Fornero) shows an increase in expenditure of almost 60 billion euros. euro to 2025, in the middle of this term. Thus the weight of pensions rises in a three-year period by 19.5%, seven points more than the gross product (including the effect of inflation). Giorgetti is therefore the first to now want an intervention on pensions that does not have an impact on the costs of the system in the medium-long term. Among other things, the minister fears the effects of leaving the work of many people still strong and with skills that are difficult to replace, for example among doctors.
Brussels does not like amnesties
Then there are the points of attention in Brussels and on the markets. In the Commission, one-off measures such as amnesties to cover permanent tax cuts – the two flat taxes in the pipeline – have never been liked, nor are they now. On the other hand, the attention perceived in yesterday’s words by the EU Commissioner for the Economy, Paolo Gentiloni, is new on the sustainable and vulnerable nature of the measures against expensive energy. The subsidies aimed at everyone – on gasoline even for the wealthiest – and which cover all consumption and therefore incentivize it, like those currently in force in Italy that the government seems to want to extend, are not convincing. Also because a 4.5% deficit only finances aid until the end of winter. It is already visible that the energy emergency, if it continues, can lead to further budgetary shifts already in the spring. Here are grafted the widespread questions on the markets. In 2023 Italy will have to place new issues of government bonds for just over 90 billion. After 2020 the second highest level since the euro has existed, but by far the highest with almost no new purchases by the European Central Bank. To find investors in its debt in 2023, Italy must therefore have (and communicate) a real growth strategy, which certainly cannot be that of amnesties, loose cash constraints or flat taxes. Fra Meloni, Giorgetti and their interlocutors in Brussels will be the most discussed topic.
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