prudent fiscal policy and rapid implementation of the Pnrr-

prudent fiscal policy and rapid implementation of the Pnrr-

From our correspondent
BRUSSELS Reduce the deficit by eliminating energy support measures by the end of the year, guarantee a prudent fiscal policy limiting the nominal increase of net primary expenditure nationally funded in 2024 at no more than 1.3%, reduce labor taxes. But also ensure effective governance and strengthen administrative capacity to enable rapid and continued implementation of the recovery and resilience plan. And then quickly complete the REPowerEU chapter to quickly start its implementation. These are the main points of the EU Recommendations to Italy for 2023. In the document, the Commission also explains that in the light of the devastating floods that hit Italy in May 2023, thethe cost of direct emergency support relating to such floods will be taken into account in subsequent conformity assessments and will in principle be regarded as one one-off and temporary measure.


The Vice-President of the EU Commission Valdis Dombrovskis and the EU Commissioner for the Economy Paolo Gentiloni presented the Country specific recommendations: the guidelines that the Member States will have to follow in the context of the 2023 European Semester to build their economic policies and the 2024 budget laws. For all countries, they are divided into four parts: a recommendation on tax policy, including tax reforms and structural; a recommendation to continue or accelerate the implementation of the national recovery and resilience plans, including their reviews and the integration of RePowerEU chapters; an updated and more specific recommendation on energy policy in line with RePowerEU objectives; an additional recommendation on pending or recently emerging structural challenges. For the first time since the suspension of the Stability Pact in 2020, the Commission provides quantitative recommendations on fiscal policy of individual countries. The indicator used there net primary expenditure (that net of one-off revenues and interest payments on debt or unemployment), in line with the proposed reform of the Stability Pact now under negotiation between member states.

Deficit procedures

Taking into account the uncertainty that still dominates the panorama of the European economy (war in Ukraine, inflation, energy prices), the Commission does not intend to open excessive deficit procedures this spring and will propose to the Council (the Member States) to do so in spring 2024 based on the 2023 results. This year the debt criterion not met by Italy, France and Finland. While the deficit criterion is not satisfied by Italy, Germany, France, Spain, Belgium, Bulgaria, the Czech Republic, Estonia, Latvia, Hungary, Malta, Poland, Slovenia and Slovakia.


As far as Italy is concerned, the Commission calls for the elimination of the energy support measures in force by the end of 2023, using the related savings to reduce the public deficit. And if there are further increases in energy prices, support measures will have to be aimed at protect vulnerable households and businessesfiscally sustainable. We must also insist on energy saving. Fiscal policy will have to be prudent, in particular by limiting the nominal increase in net nationally financed primary expenditure in 2024 to no more than 1.3%. The Commission also invites a maintain nationally funded public investments and ensure the effective absorption of grants from the Pnrr and other EU funds, in particular to promote the green and digital transitions. For the post-2024 period, a medium-term fiscal strategy of gradual and sustainable consolidation, combined with investments and reforms conducive to improved productivity and higher sustainable growth, should be pursued to achieve a prudent medium-term fiscal position.

Work, Pnrr and fossil fuels

Italy is invited to further reduce the labor taxes and make the tax system more efficient by duly adopting and implementing the enabling law on tax reform, preserving the progressiveness of the tax system and improving fairness, in particular by rationalizing and reducing tax expenditures, including VAT and environmentally harmful subsidies. Like last year, the Commission urges to align the cadastral values ​​to the current market values. Among the recommendations to our country there is also the reference to ensure effective governance and strengthen administrative capacityespecially at the sub-national level, to allow for a swift and sustained implementation of the recovery and resilience plan. Quickly complete the REPowerEU chapter to quickly start its implementation. Proceed with the rapid implementation of the programs of the cohesion policy. Finally, the call to reduce dependence on fossil fuels. Streamline authorization procedures to accelerate the production of additional renewable energies e develop electrical interconnections to absorb them. Increase the internal gas carrying capacity to diversify energy imports and enhance security of supply. The Commission calls for an increase inenergy efficiency and to promote the sustainable mobility accelerating the introduction of charging stations.

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