“There will be an opinion, but not today,” clarified an insider in Brussels. The European Commission is waiting for Italy to present the newly launched and presented stability law, yet there is no shortage of indications for the Meloni government. These are not targeted indications, since they concern all the countries of the Eurozone, but certainly, in terms of economic size and amount of debt, the recommendations acquire greater value from the third largest economy in Euroland. No indiscriminate public spending, and be careful not to dump the measures to combat expensive bills on the public budget. These are the main criteria that the Community executive looks at and will look at, for those who have already closed the draft maneuvers and those who, like Italy and Latvia, still have to notify them.
The first recommendation comes from the Commissioner for the Economy, Paolo Gentiloni. “With energy prices set to remain high next year and support measures likely to be extended, there is an urgent need to adjust their design and avoid an unnecessarily high burden on public finances and maintain incentives to reduce fossil fuel consumption. ». The second recommendation instead comes from Valdis Dombrovskis, commissioner for an economy at the service of people, and always attentive to the reasons of the proponents of rigor. “We should avoid a large-scale fiscal stimulus.” The reason for this is contained in the cards produced by the von der Leyen team. “Refrain from large fiscal expansion as this would fuel inflation,” he stresses.
In a nutshell, the contents of the measures contained in the package on the European Semester are all here, in the words of the members of the College of Commissioners. Also because, in the Italian case, until all the cards are in place, going further becomes an impossible exercise. Real opinion and recommendations will come “once the maneuver is received as fully adopted”. Until then, the other suggestions that are valid for everyone else are valid, first of all the acceleration of the green and digital transitions, with all that this entails. It means employment policies, to encourage training and integration into the labor market of those professional figures who become necessary. But it also means regulatory interventions to streamline procedures and create a more business- and investment-friendly environment in these areas. These too are preliminary recommendations for Italy from the Meloni government. Waiting to study the budget law.
In any case, the country will remain under special surveillance, and the Commission puts this in black and white in the report on the alert mechanism (or “Alert Mechanism Report”), the assessment conducted on country systems to see if there are potential economic imbalances that require a political action. For Italy they exist and persist. The EU executive document states that “in Italy the fears linked to the high public debt/GDP ratio remain unchanged”. For this reason, it is “appropriate” to examine the persistence of excessive imbalances or their correction in an in-depth analysis for Italy. At first glance, however, the risks to the sustainability of the accounts “are high in the medium term, while the expected decline in aging costs reduces the medium-term risk in the longer term”.
The general state of health of the country system is also cause for concern. In Brussels, the eurozone’s third largest economy is believed to be suffering from a combination of weak financial sector profitability and a vulnerable corporate sector. This, combined with the high level of public debt, “increases the risk of negative feedback loops” and potential contagion risks.