Refreshment Decree? 3 card game: not an extra euro, money already allocated in past decrees

1 November 20204 years ago babelfish

For the Ristoro decree, the government provided 5.5 billion but they were taken from the 100 billion already allocated with the decrees of March, May and August. The in-depth analysis by Giuseppe Liturri

Mussolini had few tanks and also battered and he needed to make military parades everywhere. Then he made a virtue of necessity and moved them from city to city, making the Italians believe they had a huge mass of armored vehicles. But they were still the same, they were just moved very quickly.

Mutatis mutandis , the story of the latest decree law ( n. 137, so-called "Refreshment ") – with which the government wanted to respond to the difficulties that will face the sectors (catering and leisure) subject to the restrictive measures decided on 24/10 – repeats the same method: it is always a portion of the same 100 billion allocated several times with the decrees of March, May and August, diverted to new purposes.

There is not a cent more. Indeed, since there is now the reasonable certainty that a significant portion of that sum is likely to no longer be spent, the government is already putting its hands forward, bringing 3.6 billion directly to 2021. In addition to doing this, the non-negligible sum of 5.5 billion (this is the amount of the charges connected to the different measures) by fishing with both hands in the different rules that remained partially unused in 2020 and using a very questionable mechanism of communicating vessels between the various measures. In other words, the Ministry of the Economy can, by bypassing the legislative power of Parliament, by its own decree (secondary rank), move funds from one measure to another.

The coverage of the various spending and tax relief measures that we will examine below is a long sequence of “ by corresponding authorization for the reduction of expenditure of…”, with the indication of the norm of one of the spring / summer decrees that are reduced.

This worries us in two respects:

He confirms that the 100 billion allocated in the three decrees are the result of hasty and incorrect estimates and the cumbersome rules did not allow a timely flow of aid to the final beneficiaries. The errors of assessment are there for all to see and, as aforementioned, precisely for this reason Minister Roberto Gualtieri reserved, contra legem , freedom of maneuver.
He also confirms that at the moment Gualtieri does not intend to deal with the purse strings for 2021 and only rummages through the bottom in search of the remaining coins. And this, in perspective, is really worrying, since the rebound in GDP in the third quarter risks remaining an isolated phenomenon and we are faced with a new economic slowdown, the measure of which will be given by the extent of the restrictions imposed for the second quarter. wave of the pandemic from Covid.

In this regard, let's examine the most relevant measures:

The non-repayable grant for the sectors subject to restrictive measures repeats the same mechanism provided for by article 25 of the "Relaunch" Decree: those who suffered a decrease in turnover in April 2020 of more than one third compared to April 2019, are entitled to a contribution equal to 20/15/10% of this reduction. We know that the sum allocated in May was quickly exhausted (confirming the erratic estimates of the Mef) and that many applicants were left out with a dry mouth. Then, instead of adding to the dose, the Government decides to repeat the mistake, only partially mitigated by the fact of paying the contribution measure equal to 100/150/200/400% (in relation to the sectors to which the beneficiaries belong) of the sum already paid with the “Relaunch” decree. The result of any number multiplied by zero is always zero (because dividing 2,400 million out of about 466,000 beneficiaries returns an average contribution of about € 5,000, almost zero). Furthermore, it is not clear why, by having electronic invoicing data in real time, the now old figure of the drop in turnover of last April was not abandoned and it was not decided to pay a substantial portion of the turnover achieved in the fourth quarter of 2019, which it represents a much more faithful parameter than the compensation due to merchants forced to reduce or close their business. But we know that, to do so, it would have been necessary to take the stock market and Gualtieri is always the one who in March considered the fall in GDP "serious but manageable" and thought he could get away with a few billion higher deficits.
The 2.1 billion allocated for a further 6 weeks of layoffs, to be used by those who have already completely exhausted the 18 weeks already granted, come entirely from amounts allocated and not used in 2020 for the same purpose. Again, no additional effort, just accounting artifice.
It is not clear what sense it makes to move the payments of social security and welfare contributions for November and therefore expiring on 16/12, to the next 16/03. By that date, the probability of finding oneself in even worse liquidity conditions is high. The error of short-term choices that do not allow any planning and concrete benefit continues.
On the other hand, the decision to refinance the export support measures, adding another 200 million in favor of the non-repayable grant disbursed by Sace / Simest, is worthy of note. As we can see, when a measure is effective, companies rush and often find themselves with exhausted funds.
The one-off contribution of € 1,000 to workers in tourism, culture and entertainment is the revival of a warm panel on which the INPS did not shine for its timeliness last April. Also in this case, sums little more than irrelevant compared to the total destruction that has invested these sectors in recent weeks, even before the limits set by the Prime Minister's Decree of 24/10.
Finally, a detail that might seem irrelevant but is rather sensational. There are approximately 68 million available for the Police, Carabinieri, Guardia di Finanza and Local Police for overtime and public order services in the next 40 days. Perhaps an extraordinary effort is foreseen to tame the squares crowded with hungry and angry citizens?

In conclusion, we must repeat what was already stated when the data of the Update to the Economic and Financial Document (Nadef) were published: Minister Gualtieri continues to act too cautiously on the budgetary effort front. He did it for the first time in March, always chasing the worsening of events, and is likely to do so today. With the aggravating circumstance of not taking advantage of the experience gained and of having in front of an already prostrate country that would not withstand the brunt of a new recession without adequate public finance intervention.

For the good of the country, Gualtieri rewrites the Nadef and the budget planning document already sent to Brussels and presents to the Chambers a draft budget that contains more resources to face the very complicated winter we are about to enter. It is not the time to worry about a public debt that is purchased in full by the ECB and which promises to remain on its books for a very long time, with a de facto sterilized impact.

If not now, when?

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/decreto-ristoro-gioco-delle-3-carte-non-un-euro-in-piu-sono-soldi-gia-stanziati-in-decreti-passati/ on Sun, 01 Nov 2020 09:20:54 +0000.