Pressing by Gentiloni for the Mes: “Italy is hurting itself”. Salvini to the EU: forward with the flat tax

BRUSSELS-ROME. Paolo Gentiloni puts both hands forward saying that «the decision is not up to us» (where “we” stands for the European Commission), «but to the Italian government and Parliament». However, he is keen to underline that with the Mes affair, Italy is “hurting itself from the point of view of its reputation” and this “is wrong”. From the Festival of Economics in Trento, the commissioner launches his warning, disguised as a “council”, to try to convince Rome to ratify the reform of the European Stability Mechanism. The patience of the EU partners is now running out, perhaps even beyond. And the political price to pay risks being high.

The one on the Mes is just one of the many messages that the former prime minister has found himself forced to deliver to his compatriots these days, alongside the alarm on the times of the Pnrr and those for the risks associated with the reforms that the Meloni government does not want to do (see the item beach concessions and cadastre) and above all to those that it has done or intends to do (such as the flat tax or the reform of autonomy). Messages that at the moment, however, are not well received. Above all by the League, which feels attached to the heart of its electoral program on flat taxes and autonomy.

Matteo Salvini does not hide his annoyance: “Whatever the European Commission says, the flat tax is a tax that works wherever it is applied”. But if his loyalists in the European Parliament puff up their chests and go on the attack of EU officials and their remarks, “which we flatly ignore and go ahead”, the moderate soul of the Carroccio is looking for a different approach, one that dialogues. «No rejection – the president of Friuli Venezia Giulia, Massimiliano Fedriga tells La Stampa -. Europe has proposed some reflections on which we are available to discuss». Fedriga certainly does not consider it a problem «if we are discussing an improvement in the taxation system that can favor citizens, such as the flat tax, and differentiated autonomy. We will respond to the merits.” Starting from the risk highlighted by the EU of increasing inequalities with autonomy: «It seems to me that unfortunately today inequalities already exist and are not due to differentiated autonomy, but to a centralized organization of the State – underlines Fedriga -. Autonomy, on the contrary, is an opportunity to improve services to citizens in different regions. And the story according to which the regions of the South are not up to autonomy is humiliating for territories that instead have the skills, competences and opportunities to improve”.

The finance ministers of the Eurozone hope that their colleague Giancarlo Giorgetti can play a key role in convincing his party mates on the ratification of the Mes, while for the Brothers of Italy the expectations are all on the premier Giorgia Meloni. “Nobody thinks that Italy should use it,” Gentiloni reiterated, letting it slip that “perhaps its size wouldn’t even be adequate for a country like Italy.” The argument to convince Rome is the same used by the president of the Eurogroup: “If Italy were to ratify the Mes, it would have more say in the debate that will open to give it a new function”. But although the pressure is intensifying at all levels, there still doesn’t seem to be a positive solution on the horizon. “I really don’t know why he lived like the Specter…” Gentiloni joked.

The concrete fears, on the other hand, are others. Yesterday the Eurozone was awakened by a freezing shower: Germany is officially in a technical recession. In the first quarter of this year, GDP contracted by 0.3% after closing at -0.5% in the last quarter of 2022. “A surprisingly negative signal” for Minister Christian Lindner, given that previous forecasts estimated zero growth. For Berlin, the drop in consumption due to inflation weighs heavily and this situation could further stiffen the German position within the ECB to push towards further tightening on rates. The fact remains that, with the German locomotive stationary on the track, Italy and the other countries of the South have become “the engines of growth”. According to Gentiloni it is thanks to the Next Generation Eu because it has allowed indebted states, therefore with less fiscal space, to be able to invest. The experiment of the common debt, according to the commissioner, can therefore be repeated, but “Italy’s role will be crucial”. If the Pnrr fails, all hope of trying again fails.