Italian economy minister defends new controversial budget bill

1 year ago 42

Italian Economy and Finance Minister Giancarlo Giorgetti has vigorously defended the 2024 budget bill against criticism from representatives of the Bank of Italy and Confindustria about the vulnerability of a budget manoeuvre in deficit and about its lack of support towards businesses.

Speaking on Tuesday at a joint session of the budget committees of the House and Senate, Giorgetti defended the budget manoeuvre in deficit (net debt about GDP at 4.3%) and a lack of focus on business support.

“The budget bill was prepared in an extremely complicated scenario, in which the uncertainty linked to recent events in the Middle East is added to the difficulties characterising the current economic and geopolitical context,” Giorgetti stated.

“A compromise had to be found within the cabinet between the different demands and the internal and external budgetary constraints,” Giorgetti said.

Minister Giorgetti also assured that the budget bill respects what was set out in the Budget Planning Document submitted to the European Commission last October and complies with the Recommendations received from the European Commission for 2024”.

More specifically, the debt-to-GDP ratio – as explained by the minister during the hearing – is influenced by expenses related to building incentives (the so-called “Super bonus”): “interest expenses as a percentage of GDP will reach 4.6% in 2026.”

Giorgetti blamed the monetary policies of the European Central Bank. “[ECB] Continuing to pursue highly restrictive policies contributes to fueling uncertainty and leading to an increase in the burden on both public coffers and citizens.”

Speaking about the GDP, the economy minister estimated downward growth for the current year, which in the Budget Planning Document stands at 0.8%. Instead, the impact on the same parameter in 2024 was assessed as “negligible.”

A lot of the remarks made by deputies and senators were devoted to privatisation. The minister of economy was asked whether the government, in addition to announcements, has a strategic plan ready in this regard. Giorgetti defended the measure, citing the benefits for the economic system produced by selling public assets, but for the presentation of a plan, he postponed any communication to the approval of the Budget law.

During the audition, Giorgetti also attempted to respond to the criticism extended by the opposition on the resilience of the national healthcare system, noting that the budget law allocates €3 billion more in 2024, which will increase to €4.2 billion from 2026.

However, in a previous parliamentary hearing, the President of the Parliamentary Budget Office, Lilia Cavallari, pointed out that the financing of the healthcare system for 2024 might not fully cover the expenses. Moreover, further difficulties throughout the planning period “could arise about staff shortages and the impact of possible new energy commodity price pressures on the health sector.”

(Marian Sisto | Euractiv.it)