Renzi liquid Cottarelli. Stability Law now in doubt – Il Sole 24 Ore

Renzi liquid Cottarelli. Stability Law now in doubt – Il Sole 24 Ore

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This entry was posted on August 1, 2014 at 06:36.
The last change is August 1, 2014 at 10:55.

Without spending cuts, or in the presence of a steep downturn, the next law would lose stability its main source of funding, making it impossible to honor all its commitments on the waiting list.

It goes from the stabilization of the bonus income tax, the new expenditure items that you will need to deal with (the cost of international missions to finance other expenses mandatory), ending with the commitments already contained in existing legislation. Last but not least, the need to ensure – as requested by Brussels – that the structural deficit is reduced since 2015 to ensure compliance with the medium-term, essentially a balanced budget. The sum of the different addends does raise the total amount of the maneuver autumn in the vicinity of $ 20 billion. And they are at least 14 billion cuts to current spending by structural realize all with the next Financial Stability Act, rising to 17 billion if you add the financial commitments already undertaken by the Government Letta, even when the cuts are to be made from 2.6 billion entered as part of the bonus coverage of income tax for the current year. The mission expects that the Government is this, and the game promises to be complex to say the least, now that the disagreements between the Commissioner to the spending review, Carlo Cottarelli, Palazzo Chigi, and the Parliament have emerged in all their evidence.

Unthinkable carry out operations of such magnitude without the decisive contribution of the overall rationalization of public spending, which in any case will have to ensure structural savings and system for no less than 32 billion. The breaking point and the real test for keeping the government is right here, on this ground, because it goes to the front investment policy choices (certainly not painless, on the side of cutting tax breaks), to take and defend Parliament in the autumn when the House and Senate will be called to approve such a plan consisting of review of the mechanisms that govern the formation of the same expenditure. The role of Cottarelli, or who will be called upon to replace it, is anything but minor, and is not limited to a simple exercise of recognition.

It is – and that’s what I was about to do the same Cottarelli – indicate precisely where and how to take the scalpel of selective

cuts. Accordingly so as to create spaces Financial to reduce taxes on labor. But if you exclude – for obvious political reasons and consensus – to intervene in the nodal areas such as health (Restrictive Practices bilateraili between the government and the regions within the Covenant Health), security (subject to a high degree of political and electoral) If the deforestation of the municipal boils down to a simple act of “maintenance”, where to intervene? Can speculate that it acts exclusively on purchases of goods and services, a sector in which pars magna is made from their health care costs? Can intervene without reopening the files of standard costs and requirements? And if – as reported by the same Cottarelli – can be booked ex ante savings yet to be realized in order to finance new spending power (the ‘portion 96′ for 4 thousand teachers), the real risk is that the very mission of the spending review is thwarted, opening in fact the way to the old, overused practice of linear cuts. That’s why the real issue is entirely political, and it will not be easy to untangle. These are questions that will be quickly dissolved, the solution of which goes beyond the “personal matter” that is behind the case Cottarelli, yesterday as defined by the Secretary to the Prime Minister, Graziano Delrio. The commitment – is to know Delrio – is to continue on the spending review ‘without any problem. It is an objective of the government and not dependent on the people who lead it. ” And the premier Matteo Renzi adds the spending will also not Cottarelli.

The point is that the side of the deficiency there is no margin. While waiting for the Istat discloses, on August 6, the GDP figures for the second half, the Ministry of Economy are already doing the math with a growth forecast that – if all goes well – will be at least halved compared to Estimates of Def April (0.8%). It follows that the nominal deficit will slip in fact to the maximum of 3%, compared with 2.6% expected in the spring. Any further slippage would require the use of a corrective action of the public finances, which in October with all probability should result in tax increases. Assumptions as to prevent, not to further aggravate the current trends in the real economy. Scenarios that require utmost vigilance and determination, even in the case where it can come to the rescue a lower interest expense due to lower spreads.

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