Italy is a country in chronic emergency

Earthquakes, floods, landslides, inundations, collapses in Italy are as frequent as they are apparently unexpected and underestimated by politics.

The problem arises from the fact that in order to carry out the works necessary for the maintenance and safety of the country, large monetary resources are needed which Italy, bound as it is to compliance with the economic parameters of the EU, is able to find in a disorganized way, limited and only through the creation of new public debt.

The Marche region is no exception to the long series of natural events that have disrupted the life of entire villages, towns, cities and industrial and artisan complexes. Specifically, the recent floods that affected the Senigallia area and the 2016 earthquake have once again highlighted how the lack of maintenance of the hydrographic basins and the wrong building construction and maintenance techniques have amplified the destructive effect of the events natural themselves.

In addition to the damage suffered, however, insult is also lurking for the inhabitants of these territories: slow reconstruction, few funds made available and suffocating bureaucracy.

From the post-earthquake reconstruction report of 2016, for example, we know that compared to about 10 billion allocated for private reconstruction, only half of it has been spent to date, while for public reconstruction the amount allocated is equal to 4.4 billion euros; the consequence of this situation is that full reconstruction is still far away, the delays are considerable and the populations continue to live in precarious conditions. https://sisma2016.gov.it/wp-content/uploads/2023/01/Rapporto-di-fine-mandato_DEFINITIVO.pdf

The situation could substantially improve if the measures already allocated, the regulatory changes aimed at streamlining the procedures launched by this government, were accompanied by tools capable of making many more resources available, speeding up interventions, and all without increasing by one public debt only euro.

Is it really possible to quickly have an instrument capable of providing the necessary economic resources, without creating new debt and speeding up the reconstruction works?

The answer is YES and the tool is already there.

In the Decree Law n.11 of 2023 which canceled the transferable tax credit for the Superbonus 110%, a derogation was inserted, in article 2 paragraph 3-quater, which leaves this instrument for interventions on buildings " damaged by events seismic ” and “ damaged by meteorological events that occurred starting from 15 September 2022 … located in the territories of the Marche region ”.

The Government, therefore, has decided to continue granting a transferable tax credit to the earthquake victims and flood victims of the Marches to allow payment for the necessary works. Now we need to push to extend this measure to the flood victims of Emilia-Romagna as well, but in the meantime we are making this possibility known to those who already have it, because few know about it.

Certainly it would be better to improve the characteristics of the tax credits granted, in order to eliminate all the complexities introduced by the Mario Draghi government for the sole purpose of preventing their circulation. Once it has been verified that the subject has the right to have this refund with appropriate and exhaustive technical documentation, the tax credit must be able to circulate freely and have the guarantee that it will never be lost. Otherwise, insult is added to the injury.

The new version of the MGDD 2022 Deficit and Public Debt Manual, edited by Eurostat, clarified that if its "lossability" is reduced, the tax credit becomes "payable" in any case even if "non-refundable". So since it is still considered "payable" according to the definition of Regulation n.549/2013 (SEC 2013), then it might as well make it even more certain and secure. Using all the features introduced in the new MGDD, the tax credit can be transferable to everyone an infinite number of times, carried over to subsequent years without ever expiring and usable to offset any debt to the State, perhaps in a single installment after 2 or 3 years , because it is sufficient time to generate an increase in tax revenue for the works performed.

Let us now see, according to Regulation n.549/2013 (SEC 2013), which accounting treatment is provided for in the State budget, for the "payable" tax credit:

– it must be considered an expense when it is issued, increasing the deficit, but never having to be “paid”, it does not generate any cash outflow;

– it is not included in the calculation of the public debt, which is the biggest problem for Italy, because it never generates any present or future financial obligation, but only a reduction in tax revenue after 2/3 years, offset by higher tax revenues in the first 2 years.

In practice, the State provides the citizens of the Marches, and we hope also of Emilia-Romagna, with a payment instrument accepted by all and exchangeable in euros both by banks and financial institutions, and by companies with adequate fiscal capacity.

A payment instrument that for the State does not imply any cash outflow and any increase in public debt, but only an anticipation of the future loss of revenue that will exist anyway if no action is taken, leaving the territories in conditions of semi-abandonment. It is therefore a convenient measure for the State and certainly decisive and fast for both the population and the companies concerned.

A more extensive description of the proposal can be found in this document which can be downloaded from this link: https://drive.google.com/file/d/1BS6Gjz1mloMkX6Sf8pj5TMUlwAarC5cX/view?usp=drive_link

This proposal of ours is therefore addressed both to the Government, but above all to the Mayors of all the Municipalities of the Marche and Emilia-Romagna concerned.

Fabio Conditi and Stefano Di Francesco

respectively President and Vice-President of the Moneta Positiva association

---

---

The article Italy is a country in chronic emergency comes from Scenari Economici .

---

This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/litalia-e-un-paese-in-emergenza-cronica/ on Thu, 15 Jun 2023 17:31:54 +0000.