Carnet de voyage, ou : souvenirs d’Italie
I'll put two or three figures here, the less distracted will know why. Let me start with the violations of the 3% deficit-to-GDP rule:
From 1999 to 2022, France violated it 17 times, Italy 11.
I continue with the cumulative primary balance of the public budget (i.e. the balance of the public budget net of interest expenditure):
France has accumulated deficits of 973 billion, Italy surpluses of 282 billion.
Let's also add interest expenses: perhaps this way the Italian situation will appear dramatically worse, given that we are crushed by the debt that past generations have left us (and that's always enough with these future generations! Let's talk about the past once in a while!):
Eggy! Even so, France is doing worse than us: it has accumulated 1,974 billion in total deficits, against only (so to speak) 1,338 billion in Italian deficits.
So why is our debt/GDP ratio a disaster compared to France's? Well, in the meantime, let's look at these reports:
We are not doing very well, but in our history there is already a significant episode of decrease in the ratio, from 1994 to the 2008 crisis, at an average of 2 percentage points per year. There is nothing like it in French history. In the Italian future there is (according to the IMF) a decrease in the ratio, in the French one there is an increase.
After that, you can imagine the rest: those who wanted and were able to support investments and a welfare state with a deficit suffered fewer penalties in terms of growth. This can be seen from the cumulative real growth rates:
which shows us how France, in Euroland, has grown about three times as much as we do (with a primary deficit equal to more than three times our primary surplus , it doesn't take much). So our debt-to-GDP ratio problem is a denominator problem (GDP), while the French problem is a numerator problem (debt).
What do you say: do I tell him or do I not tell him? If I tell them, then I'll go back to telling you what they told me…
This is a machine translation of a post (in Italian) written by Alberto Bagnai and published on Goofynomics at the URL https://goofynomics.blogspot.com/2023/04/carnet-de-voyage-ou-souvenirs-ditalie.html on Tue, 11 Apr 2023 14:00:00 +0000. Some rights reserved under CC BY-NC-ND 3.0 license.