Stability Pact, an ESM that has made it. But it was Germany who won, not Italy
The EU he found agreement on the new one Stability pact. The agreement was signed between France And Germany and he also convinced Italy. “In a spirit of compromise – explained the Minister of Economy Giancarlo Giorgetti – We have decided to agree to the reform proposal“. The new fiscal governance – we read in Il Fatto Quotidiano – will therefore be a little less “austere” of the old one, but equally confused and therefore politically “interpretable“: Rome's only victory is that until 2027 – that is, for the duration of the legislature – everything will be applied with the good old “flexibility”. In essence, the new Stability Pact is an ESM that made it: “The unanimous agreement reassures the markets”, said the rotating Spanish presidency of the EU. The maximum deviation from the established trajectory is lo 0.3% annual deficit or 0.6% cumulative at the end of the plan: one of the “concessions” of the Franco-German agreement. This is the so-called “preventive arm” of the Pact, which remains of solidly austere structure.
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What happens, though, if you end up in infringement procedure for debt or deficit, which will (also) happen to Italy a June? We move on to “corrective arm” which – continues Il Fatto – Germany and the other rigorists have imposed on the rest of Europe. Those in the corrective arm, in fact, must not only respect the multi-year plan, but guarantee minimum annual cuts of debt and structural deficit: respectively at least 1 and 0.5%. They may seem small figures, but they are rigid and cumulative over time – in combination with the “preventive arm” – perpetuate the low growth equilibrium which is the true figure of the EU in economic terms. Then there are the sops. Meanwhile in three-year period 2025-27 in calculating the deficit the Commission will take into account the increase in the cost of debt due to rate rise. A useful discount for Italy, which adds to the possibility of considering “relevant” le defense spending and take into account Pnrr. This is the only real victory for Italy.
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