Budget change or stabilization of public spending?
Speech by Alessandra Servidori, professor of labor policies, member of the Steering Council for programmatic activity in the field of economic policy coordination at the Presidency of the Council
Looking at how things stand: a budget change is not possible but only a rationalization of public spending is foreseeable.
The Economics and Finance Document ( Def ) and the Note on the Economics and Finance Document (Nadef) are the main dossier of economic and financial planning. Each year by 30 April it is drawn up by the Presidency of the Council, approved by Parliament, the Government undertakes to present the budget law and a part is sent to the Commission and the European Council which draws recommendations.
By 10 September, the Def is then integrated by the Nadef budget note which is approved by the Chambers by 20 September. All this every year. Well, the confrontation between Dragons and Melons on this document had as its protagonist the Note which, alas, was probably neither studied nor well explained by the newspapers (including economic ones) all caught up in the chase of totoministers. And instead it is fundamental since it is estimated in the Nadef report that of the approximately 191.5 billion that the EU has to invest over the entire period from 2021 to 2026 and therefore has assigned us, only 20.5 billion will be spent by 2022.
Considering the entire path from 2021, the total expenditure should have been 33.7 billion euros, while looking at 2022 alone, the Def provided for a total expenditure of 29.5 billion euros, 14.5 billion more than the Nadef of 15 billion.
So we will have to spend many more euros in the coming years, namely: 41 billion in 2023, 47 billion in 2024, 48 billion in 2025 and 35 billion in 2026.
The clear question is that the difficulties to be faced are enormous also because if the projects have been well divided into the missions of the NRP, the delays in the actual programming and concrete implementation and the progress of the projects so uncertain and slow are certainly to be attributed to the large ones. difficulties of the Public Administrations involved, burdened by the Baroque bureaucratization and unable to carry out the functions and all the necessary practices to then set in motion access to the funds of the NRP, even if the PA reform proceeds.
Local authorities are the most disarmed even if the government has arranged various initiatives including the temporary hiring of personnel intended to directly or indirectly support officials and staff: 1000 experts to support and 2800 more hires to strengthen public administrations in the south. But for the 1000 experts a fixed-term contract has been foreseen (a few dozen for each region) and also for the technicians of the south there are very few memberships and many non-acceptances, because they are poorly paid. As a result, the government was forced to "hijack" other public administration officials with similar skills to cover the required staffing needs. This has evidently contributed to exacerbating the delays still in progress dramatically.
To the technical difficulties, Nadef adds and emphasizes that many works have not started or are delayed due to the increase in the cost of raw materials and energy. For this reason, a series of measures have been introduced aimed at supporting not only the public administration but also the companies involved in the implementation of the projects such as the cancellation of the rates for electricity and the reduction of those for gas, extraordinary contributions for companies in the form of tax credit and the reduction of excise duties and VAT on fuels.
A fund was also set up for the implementation of projects involving municipalities with more than 500,000 inhabitants and the fund was strengthened to support the presentation of proposals for important common projects of European interest (Ipcei).
With the aid decree ter, the University Housing Fund was introduced for new beds for students, and the resources contained in the fund for non-deferrable works were also extended to projects financed with the NRP.
Finally, it is established that the administrations can use the resources assigned and not used for the award of contracts or for the granting of public grants to meet the higher costs. The Note report then indicates other interventions to counter the increase in costs with the introduction of clauses for the revision of prices. For example, in the event of increases of more than 5% of the original price, compensation of up to 80% of the surplus is envisaged. For this operation, the resources assigned in the context of the same interventions but not used can be recovered. Only in the event that these funds are not sufficient, the contracting authorities can use the resources of the fund for the continuation of public works. The endowment of which is increased by 1 billion euros for 2022 and 500 million for 2023. For the procedures for awarding public works started between 18 May and 31 December 2022, the contracting authorities can compensate for the price increase also with the fund for the start-up of non-deferrable works which has an initial endowment of 7.5 billion euros to which another 1.3 billion has been added with the aid decree bis. An additional € 150 million was then set aside for the price adjustment fund.
So the government in office has created over 12 billion with funds to implement the PNRR and not block it but beware since we have well over 60 billion in debt in 2022 to meet the costs of energy and raw materials.
The President in pectore Meloni must necessarily have a government of experience that guides in the wake of a rationalization of resources and a rigorous method in this very difficult path in which Italy is in difficulty and in the most evident risk of irreversible crisis.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/variazione-di-bilancio-o-stabilizzazione-della-spesa-pubblica/ on Tue, 18 Oct 2022 04:48:27 +0000.