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Budget law, Galli (Observatory on public accounts): "Interests eliminate the maneuver"

"We are paying the consequences of the aid measures, which are often sacrosanct, throughout the pandemic period"


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The alarms launched by the Minister of Economy Giancarlo Giorgetti are acceptable: the resources available for the maneuver will simply be zero. “More than 'treasures'. This does not mean that the maneuver cannot be done, but it cannot be done in deficit and coverage will have to be found within it." This was stated by Giampaolo Galli, economist and director of the Observatory on Public Accounts founded by Carlo Cottarelli, in an interview with "Repubblica" shares the prudence of the head of the Economy and invites him not to give up in the face of the many pressures to implement deficit measures. The minister said that the ECB's increases are to blame if resources are drying up: “Interest spending on our public debt continues to rise. It was at 83 billion last year and risks reaching the ceiling of 100 billion already next year, ahead of what was written a few months ago in the spring Def where it was expected that it would be reached in 2026. The tables of the same Def surprisingly predict a reduction in interest in 2023 of up to 75 billion, but with unconvincing reasons, linked to the performance of index-linked securities which pay less interest because inflation is falling".

“As we have seen in recent days – continues the director – and the minister himself confirms, the increase in interest expenditure is an inevitable path given that rates have risen more than expected and, as clearly stated by the ECB, even if they stop rising, they will remain high for a long time, and therefore their progressive effect will continue to be passed on to the debt." We are paying the consequences of the aid measures, which are often sacrosanct, throughout the pandemic period: "For some measures, we have gone well beyond the rational: I am obviously thinking of the 110 percent bonus whose effects continue to unfold day after day , nullifying any space for important measures. As for the super taxes on banks, if and in the form in which they will see the light, they cannot be used as coverage because the Accounting Office has not prudently quantified them".

On the superbonus theEurostat reclassified the figures, saying that the payments should be ascribed to the year in which the works began and not spread over subsequent ones: “Yes – confirms Galli – in March there was a first decision to this effect. Thus, the 2021 and 2022 deficit jumped to 9 and 8 percent respectively and the 2023-24 two-year period was 'lightened' by one point of GDP. We are now awaiting new pronouncements from Eurostat, but the substance should not change. However, the Treasury entered in the April Def, once the reclassification took place, deficit objectives of 4,5 percent in 2023 and 3,7 percent in 2024. I hope that these objectives will not be watered down in the Nadef that the government will have to approve in the next days". Finally, regarding the Stability Pact: “It is clear that with rising interests, slowing GDP and growing construction loans, it will be very difficult to keep the debt/GDP ratio on a downward trajectory. We risk being above what is foreseen by the Pact in both the 'new' and the 'old' versions. The fact is that we must reduce the debt regardless of the Pact because the debt is dangerous for the stability of the Italian system." “Even if the suspension were to be further extended – concludes Galli – Giorgetti's statement that he doesn't sleep at night thinking about the treatment that the markets may reserve for us would still be justified. The feeling is that the truce is about to end."

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