The EU recommendations to Italy: hurry up with the Pnrr, reduce the debt

Restore the public accounts by reducing the debt, strengthen the administrations for the implementation of the Pnrr, push on the ecological transition. These are the indications that the European Commission, in its six-monthly Recommendations to member countries, provided to Italy this morning. In the center of the text is a new parameter, the ceiling on primary expenditureconsidered for the first time net of one-off income, interest and investments for unemployment: Italy will have to maintain itself in 2024 within a 1.3 percent increase. A threshold set up specifically in view of the new economic governance of the Stability Pact, recently presented at the European level.

In general, despite the optimistic forecasts of a few weeks ago for the Italian economy – with GDP growth of 1.2 percent in 2023 and 1.1 percent in 2024 -, Brussels remains cautious. “Although there have been some improvements, vulnerabilities related to high public debt and weak productivity growth persist”, writes the Commission. First of all, it looks to the funds of the Pnrr, with Italy still awaiting the third installment of funding. The EU asks the government to speed up, hoping for a “continuous, rapid and constant” implementation. To make it possible, invite a “strengthening administrative capacity”, not only at a national level but by all the entities involved, starting with the municipalities.

The steps to be taken on fiscal policy are clear. It serves “relax existing energy support measures by the end of 2023, using the related savings to reduce public debt”, says Brussels. In practice, a transfer to improve the balance. And, if a price increase makes it necessary to introduce new bonuses, these will have to “protect the most vulnerable households and businesses and be sustainable from a fiscal point of view”.

Likewise, Europe asks to proceed with a reform of the cadastre: “Align cadastral values ​​with current market values”, is the diktat of Brussels. As well as there is a need to cut labor taxes, still too high for the Union, without affecting fiscal progressivity. With the last big goal that remains there ecological transition: “Reducing dependence on fossil fuels”, says the Commission, promoting “the diversification of energy imports and sustainable mobility”.