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This article was published on November 17, 2015 at 10:45 am.
The last change is the November 17, 2015 at 11:23.
BRUSSELS – The European Commission has published this morning expectations opinions on national budgets of 2016 presented in October . The EU executive said to consider the Financial Italian ‘at risk of not respecting the Stability Pact “because of a” significant deviation “from the planned adjustment path to a balanced budget. That said, the EU executive has confirmed rumors of Eve, giving the benefit of doubt to the government and referred the case for about the next spring. In this interview, the vice president of the European Commission Valdis Dombrovskis, 44, explains the reasons for the judgment.
In general, how would you rate the government’s economic policy Renzi?
> There are positive developments. Between 2015 and 2016, economic growth is expected to strengthen (from 0.9 to 1.5%) and the nominal deficit is expected to decline (from 2.6 to 2.3% of GDP). We see considerable efforts to reform the economy, in particular measures on the labor market and in the constitutional system. That said, we see in the budget for 2016, the risk of a significant deviation from the planned adjustment path to a balanced budget.
What do you mean?
The structural deficit is expected to increase from 1.0 to 1.5% of GDP. Rather than better than 0.1% of GDP as planned, it is expected a decline of 0.5%. The Italian stability program initially provided for a nominal deficit of 1.8% of GDP. Instead it will be 2.3%. Although he has already received some flexibility of 0.4% of GDP, the Italian Government has requested additional room for maneuver: 0.1% for structural reforms, 0.3% for public investment and 0.2% for spending for refugees.
nziché reject outright the Budget, given the “significant deviation” dell’andandamento deficit, have decided to postpone the trial in the spring. Why?
We decided to give the benefit of doubt to Italy, and to do some ways an ex-post analysis, because the demand for new flexibility has come out of phase with the normal timing of the European Semester . Usually, the request must be made in the spring of the year preceding the one referred to by the Financial Regulator. Italy will have to prove in these next few months that there is actually an increase in public investment over the previous year. We also want to reach out and touch the further progress of modernization of the economy, as promised by the government. As for the clause refugees, the analysis will be made as to any other country on the basis of costs.
If the clauses will be granted in the spring of next year, will mean that the public accounts Italians in 2016 will no longer be marked by a “significant deviation”?
Yes, it is.
In your opinion, urged Italy “to take measures necessary (…) to ensure that the 2016 budget will respect the Stability and Growth Pact. ” What do you mean? You have been asking Italy new measures to reduce the deficit?
The phrase is standard. It is due to the presence of a risk of a significant deviation trend of public finances. We will remain in close contact with the Italian authorities over the coming months. It is up to Italy to choose whether to adopt new measures to reduce the deficit or instead pursue the implementation of flexibility clauses, working on reforms and investments. We are looking for the right balance between fiscal consolidation and adoption of new reforms, in order to support the economy.
How do you assess the situation of public debt?
We expect a decline in the debt in 2016 compared to 2015 (from 133.0 to 132.2% of GDP). This is good news. Of course the debt remains high, and budgetary flexibility has inevitable implications on this front. Do not forget that the same flexibility allows only a temporary deviation from the adjustment path to a balanced budget.
In fact, the room for maneuver will be offset in the coming years, also to respect the rule It provides for a reduction of liabilities of one-twentieth per year on average over three years. In the past, you did a report on the sustainability of Italian debt. It is planned another short?
Not for the moment, but I can not exclude that in the spring we decided to prepare a new report, it was just to update the previous one.
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