The National Recovery and Resilience Plan "must be accompanied by budget planning aimed at rebalancing public finance in the medium term", reads the guidelines of the Plan. That is: more taxes and less spending
The National Recovery and Resilience Plan "will have to be accompanied by budget planning aimed at rebalancing public finances in the medium term, after the strong expansion of the deficit expected for this year as a result of the pandemic and the significant interventions to support the economy were implemented with three successive decree-laws. The Government will detail the path of recovery of the deficit for the years 2021-2023 in the Update Note of the forthcoming Def. The programmatic scenario will include the forecast of the use of the loans envisaged ”by Europe.
This is what we read in the guidelines of the Plan, which explain how the use of European resources in the form of loans will contribute to increasing deficits and debt, as explained by the Minister of Economy Roberto Gualtieri yesterday. And the day before it was the analyst Giuseppe Liturri who explored the topic in Start Magazine .
"Budget planning aimed at rebalancing public finance in the medium term" means only: more taxes and less spending.
There is another passage in the Guidelines that makes us understand the path that awaits Italian public finance in parallel with the resources of the Recovery Fund: "Italy's public debt is the second highest in the EU in relation to GDP after Greece. According to forecasts, at the end of 2020, it will undergo an increase of over 20 percentage points, due to the pandemic and the huge measures to support income, liquidity and employment implemented during the year with the emergency measures of the Government, whose estimated impact on the PA's net debt is 100 billion, 6% of GDP. Strong and stable GDP growth is essential to ensure the sustainability of the country's public debt and social situation. In turn, growth requires higher public investments and greater system competitiveness to attract both domestic and foreign private investments ”, reads the guidelines of the National Recovery and Resilience Plan transmitted yesterday to Parliament.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/ecco-le-parole-del-governo-che-celano-la-mazzata-di-austerita-nel-piano-di-ripresa/ on Wed, 16 Sep 2020 14:10:50 +0000.