Italy
Georgia Meloney has to resign herself to austerity budgets
The Italian prime minister has made election promises that he must now put on hold to please the EU. She hopes it’s just a reprieve.
Published
“We need to reduce waste and better spend the few resources we have,” said Giorgia Meloni, head of the Italian government.
Reuters
Moderate, serious and non-excessive 2024 budget: the head of the Italian government, Giorgia Meloni, wants to tighten the screws to guarantee the rigor of the accounts in Brussels, even if it means giving up, at least temporarily, on election promises.
By the government’s own admission, the lack of tax revenue in the context of an economic recession has made budgetary room for maneuver very tight. As a result, there is a risk that public deficit projections will be revised upwards. “Waste must be reduced, the few resources we have must be better spent”: this is Georgia Maloney’s mantra, a far cry from the populist rhetoric that preceded her inauguration in October 2022.
To fill the state’s coffers, the right-wing and far-right coalition cut “citizenship income” for the poor, introduced a tax on banks’ super profits and launched a new privatization idea.
The rescue plan was delayed
A surprise 0.4% drop in GDP in the second quarter, bad times in its main trading partner Germany and delays in its rescue program funded by European funds weighed heavily on Italy’s accounts.
Promises such as the definitive suppression of the Fornero Law of 2011, setting the retirement age at 67, have been postponed indefinitely. A temporary system currently allows Italians to retire at age 62 with 41 years of contributions.
The government, which is due to send its copy to Brussels by mid-October, will renew cuts to the tax burden on modest incomes at a cost of around ten billion euros, and introduce measures to support large families.
Last “at least ten years, to do everything that needs to be done”
The horizon set by the government to fulfill its election promises is the term of the five-year legislature, i.e. till 2027. Deputy Prime Minister Matteo Salvini believes the alliance will “last at least ten years and accomplish everything”. To be done”. “To date, the Maloney government seems very stable. In the absence of a united and determined opposition, it could go all the way to the end of the legislature,” comments Valerio De Molli, CEO of The European House – Ambrosetti.
A more generous system of tax incentives, known as “superbonuses”, will again weigh on the accounts, making homes less energy efficient, as has already been the case for the past three years. Giorgia Meloni lamented on Thursday that the cost of the mechanism, inherited from the former government of Giuseppe Conte, created in 2020 to revive the economy, “will exceed 100 billion euros”.
A huge amount for a country with public debt reaching over 144% of GDP.
Rome was considering extending the suspension of the stability pact until 2024 if no agreement on its reform was found by the end of the year, but European Commissioner for the Economy Paolo Gentiloni on Saturday expressed hope, ruling out this scenario. . The agreement, which limits general government deficits of eurozone member states to 3% of GDP and public debt to 60% of GDP, was suspended in 2020 due to the Covid-19 pandemic.
“A return to the old rules would be dramatic,” Georgia Meloni warned Thursday. We hope Italian Paolo Gentiloni will further protect national interests. A comment shared by Matteo Salvini: “Recently, I had the idea of a European commissioner playing with the jersey of another national team,” the league’s president commented on Wednesday.
(AFP)
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