The 4 bombs (full of fears) of the super European Moavero Milanesi on the Recovery Fund
What the former Minister of European Affairs wrote in the Monti and Letta governments, then Foreign Minister in Conte 1, Enzo Moavero Milanesi, about the Recovery Fund
Once the echo of a local electoral consultation which, according to all the contenders before the outcome of the vote, would have had no repercussions at the national political level, it is perhaps appropriate to return to talking about facts and people who instead affect, and they will affect even more, heavily on the fate of the country. Let's talk about the Recovery Fund. 750 billion to be spent among the 27 Member States in the three-year period 2021-2023. 65 billion in subsidies and 127 billion in loans to Italy.
On Saturday, an editorial by Enzo Moavero Milanesi in Corriere della Sera went substantially in silence, which instead should be commented almost word for word, as it contains and confirms all the doubts that have arisen for months now.
The relevant difference, I would say enormous, is that the author is not a quisque de populo. Former Minister of European Affairs with Mario Monti and Enrico Letta, then Foreign Minister in Conte 1, Moavero is one who was born there in Europe and is a profound connoisseur of Brussels. So if he decides to take pen and paper and write down his perplexities, it means that the problem exists, and it is also of great importance.
Moavero, like us, has undertaken the reading of the hundreds of pages of draft regulations published by the Commission since May 28, to which the guidelines and working documents published on Thursday 17 have been added . And, judging by the words used by the professor, while wrapped in the usual soft tone, he must have literally jumped on his chair.
Four depth bombs dropped that will not fail to raise an adequate mass of water in the coming days:
- The European Parliament's claim to impose the explicit condition of respect for the rule of law to access the funds risks triggering the veto of Poland and Hungary to the Recovery Fund. Milanesi does not rule out "possible tail blows of those unhappy with the compromise reached in July at the European Council".
- Since subsidies and loans will not rain from the sky, the Commission will get into debt on the markets and will have to repay those sums from 2028 with its own income, that is, with taxes and contributions requested from Member States. This means a significant increase in the budget (up to 2% of the Gross National Income, from the ordinary 1.4%) fueled by taxes, such as those on digital, plastics, CO2 emissions, which have been the subject of discussions without outcome. Moavero warns that “ its approval requires unanimity in the EU Council and then a favorable vote in all the parliaments of the states. If only one were to say no, the scenario would change sharply and, at the very least, the positive balance of the financial flow would be considerably reduced. A woe for Italy that would see the announced subsidies almost halved ”.
- There is total legal uncertainty. To date, Recovery Fund simply does not exist, there is no shred of legislative instrument to refer to. in fact, the agreement of 21 July in Brussels has a purely political value and the draft regulations published by the Commission at the end of May “could change because so far they have not been adopted by the European Parliament or the Council so far ”. Today we are therefore discussing " a singular effluvium of« soft-law "precedes, with clarifications, clarifications and interpretations, the formal discipline of the fund which for now does not exist". In short, we are talking about nothing.
- As if that were not enough, the Commission's drafts, which in any case " contain severe and unusually meticulous provisions", are distinguished by:
- allow a, albeit temporary, reduction in taxes. A measure limited to 2-3 years, with all the limits connected to temporary nature, as long as it is “ functional to the launch of a structural reform ”.
- Provide for the applicability of state aid rules. " What is the point, then, in the exceptional framework of the Recovery Fund, to reiterate the need for complicated ad hoc procedures on state aid, which can lead to the exclusion of various companies from the benefits ?" Asks an astonished Moavero who " escapes the logic" of this prediction.
- Lastly, and this is really sensational, contain the reference to the rules of the European Semester and the infringement procedure which, although suspended, hang on countries like ours that " if they find themselves in this infringement procedure and delay in corrective actions to get out of it, the loans of the Recovery Fund could be suspended as a sanction ”. A " questionable plan, given that it is precisely the States – like our Italy – in greater budgetary difficulty and therefore, subject to procedure, that have the greatest need for EU funds (both extraordinary and ordinary)". Where "questionable", in diplomatic language it means sensational nonsense that Moavero emphasizes by arguing that " such a condition hangs over the future and makes these States further subordinated to any future recommendations and macroeconomic requirements of the Union ".
Ultimately, when we wrote to you that the Recovery Fund was the tool to definitively destroy every autonomous choice of economic policy in Italy and consequent prospect of growth and therefore mark the definitive subordination of our country to Brussels, we were guilty of excessive optimism.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/le-4-bombe-di-timori-del-super-europeista-moavero-milanesi-sul-recovery-fund/ on Tue, 22 Sep 2020 05:05:32 +0000.