the reforms of the Stability Pact and state aid to be discussed together with marzo-Corriere.it

FROM OUR CORRESPONDENT
BRUSSELS – The easing of state aid rules and the reform of Stability Pact for Italy they must go hand in hand and should be discussed at March European Council. The government explains it in a six-page document sent to Brussels on Tuesday evening to illustrate the Italian point of view on the EU’s response to the law on reducing inflation (IRA) and the need for a fully-fledged European industrial policy, in view of the summit of EU leaders on 9-10 February. On Wednesday the president of the EU Commission, Ursula von der Leyen, will present the plan to support the green industry which foresees, among the various measures, the easing of the rules on state aid, which Berlin and Paris like a lot, plus other actions including a fund for sovereignty that does not convince Germany and the Nordic countries.

For Italy, explains the document viewed by Courier, easing state aid rules is not the answer, as it would carry the risk of fragmentation of the internal market. Over 77% of State aid approved under the current scheme is concentrated in two Member States and this imbalance could further increase if we give free rein to national governments, as not all Member States have the same fiscal space to provide State. For Rome, the response to the maxi subsidy plan of 360 billion dollars put in place by the United States to help American industry in the green transition must include a series of actions with different time horizons. Some can be done quickly, others will take longer, and correct sequencing is key.

But above all, and this is the central political point, to maintain a level playing field for businesses throughout Europe, the decision on the “Temporary Crisis and Transition Framework” should be discussed together with other relevant topics in the context of European economic governance. The European Council in March – reads the document – could focus on both topics, providing the European institution and the Member States with sufficient leeway for an impact assessment. In short, for Rome, state aid and the Stability Pact should be a single game. This makes the game more complicated. Because Berlin will have to choose which team to be on. Frugal countries like the Netherlands or Sweden are skeptical of an easing of state aid rules (unlike Germany) but also of a new sovereignty fund and a too flexible Stability Pact (on both in line with Berlin).

Italy proposes a series of policies to mitigate the effects of US Wrath starting with dialogue with the US. But it remains essential to address the key issue, namely the loss of competitiveness of the European industrial system accelerating the green and digital transitions. As for the easing of the rules on state aid, simplification must not turn into a “pass” for everyone, a policy of simplification and flexibility is necessary, but must be proportionate, based on concrete data and targeted. While thereThe reform of the Stability Pact currently under discussion between EU countries should take into account the substantial investments that member states will have to make in the coming years to support the green and digital transition and to promote competitiveness in leading sectors. For Rome a system of common fiscal rules that encourages public investmentboth in terms of promoting strategic investments and improving growth potential, could be one of the key elements of the new Stability and Growth Pact.

Another crucial point is investment, which cannot be based exclusively on national resources but must bring together private and public both at national and EU level. In the short term it is essential to ensure adequate leeway for redefine investment priorities in the Pnrr and cohesion policies. The mid-term review of the EU budget will provide an opportunity to examine existing European funds and to assess whether some of them need to be refocused. For Italy, the real turning point would be the creation of European funds to finance strategic projects and the proposal to establish a European sovereignty fund, aimed at the most strategic sectors of the EU economy, a step forward in the right direction.

Finally, it is necessary to pursue strategic autonomy through resilient value chains and trade agreements.