A maneuver without a vision, which lacks strong anti-cyclical interventions. Confindustria expresses its disappointment with a budget law that penalizes businesses. And he finds himself in harmony with the unions in criticizing a provision considered lacking in direction and with partial and timid measures. More could have been done, it is also the chorus that rises from the trade associations and local authorities. All are answered by the minister of the economy Giancarlo Giorgetti, who defends the system of a budget law built in a short time and in an economic framework with many risks: it is a “courageous and responsible” maneuver that will be useful to Italy.
But that must necessarily take into account the objective of “sustainability of public finances”. It is along this trajectory, explains Giorgetti in more than two hours of hearing before the joint budget committees of the House and the Senate, that the whole structure of the budget law moves. This also includes the “painful” choice of having to cut the inflation adjustment of pensions: an intervention that “corrects the trend” of exponential growth in pension expenditure by approximately 10 billion over the three years. “I would have preferred not to do it, but in the absence of this the squaring of the circle could not have taken place”, admits the minister. The moment is difficult, he explains: the economy is slowing down and the surge in inflation “puts our businesses at risk of survival”, with an impact on families that is “particularly serious” for the lowest incomes. But for Giorgetti “the pessimism prevailing today” on the prospects for our economy cannot be shared.
He therefore quotes Churchill and unleashes optimism: GDP could register a decline at the turn of the year, but the economy is “resilient” and will regain momentum in 2023, thanks also to the impulse of the Pnrr. For next year, the GDP estimate has been limited to a prudential +0.3%, but the bar will rise to almost 2% in 2024 and for 2025 the aim is to exceed the forecast of +1.3%. Returning to the manoeuvre, the minister defends the political choices, with the start of measures in the government program which will be completed in the five-year period (there will be time and ways to extend the flat tax to employees too, he says, and for the wedge the goal is 5%), assures that there is no amnesty, that the ‘tax truce’ also responds to the need to counter the impact of inflation, minimizes on payments with the POS (“if the restaurant does not accept, change”), it opens on the extra profits (“we are available to correct any distortions”), and on the superbonus it confirms that we are working to unblock the credits, but also highlights the problem of the offer.
The extension of tax breaks for companies in the south is also on the way, while any new interventions on energy will be evaluated in March. Finally, he says he is ready to accept any criticism, as long as it is not said that the most vulnerable have not been protected. And the criticisms come. Confindustria raises its voice, branding the wedge cut as “laughable” and criticizing the decision to direct resources towards objectives “in our opinion not priorities at this stage and questionable on their merits”, such as flat taxes and early retirements, thus penalizing companies, says the president Carlo Bonomi. The unions were also disappointed, precisely on the day when the maneuver was also at the center of the strike by grassroots organizations that demonstrated in many cities. The judgment of the CGIL and UIL is clear-cut, as they have in the meantime called the first territorial strike in Lombardy for 16 December: for the CGIL it is a short-term manoeuvre; for the Uil it lacks a direction of travel. The CISL is more cautious: good about the emergency, but not expansive enough. Many are asking to do more. The builders’ association, in particular, is once again pressing for the release of credit transfers: “The cry of alarm from families and businesses reaches us ever louder every day”, warns Ance. And the Court of Auditors, while acknowledging the broad scope of the provision, highlights “elements of uncertainty on the public finance framework” and warns that the increase in the ceiling and cash and the measure on the pos “may be inconsistent” with the objectives of the Pnrr.
Meanwhile, the race for the Pnrr is proceeding according to plan, even with the change of government, and Italy can already glimpse the third installment, at the end of the year, of almost 20 billion euros. It is not only Economy Minister Giorgetti who reassures that the December objectives are within reach: even the European task force, after touring the ministries in Rome this week, returns to Brussels satisfied because it has not encountered any anomalous slowness or worrying critical issues that could have jeopardized the disbursement of the December installment.
And there is also another step forward: discussions have begun between the Government and EU technicians to modify the plan, which for many ministers has become unrealistic due to the soaring costs of the war. Brussels agrees, as long as the changes concern individual investments and not all, and the reforms do not touch each other. “In these days, we are working hard to achieve the 55 objectives of the second half of 2022”, we are “already well advanced and we will certainly achieve this goal too”, said Giorgetti at the first annual event on the Pnrr organized by Italy together with the European Commission , not surprisingly at the end of the mission of the EU technicians. The commissioner for the economy, Paolo Gentiloni, explained that the European team has “verified” an “extraordinary” level of commitment from all the administrations, demonstrating that if the Draghi government had worked well, the new one “is working just as well” . So much so that the EU task force itself went so far as to say that it was “encouraged” by the progress on the implementation of the Pnrr, and “quite optimistic” that the third installment could arrive on schedule, i.e. at the beginning of 2023.
I am a journalist who writes about economics and business. I have worked in the news industry for over 5 years, most recently as an author at Global Happenings. My work has focused on covering the economy news, and I have written extensively on topics such as unemployment rates, housing prices, and the financial crisis. I am also an avid reader and have been known to write about books that interest me.