Ignazio Visco, former Bank of Italy: “With the new EU rules there is greater flexibility, but watch out for surprises on public accounts”
Ignazio Viscoformer governor of Bank of Italy, takes stock of the Italian public accounts and the prospects relating to the new stability pact signed in Europe. Visco is very critical of the Super bonus: “That – says the former governor to La Repubblica – was a big mistakea costly mistake, and that then someone has to pay. The idea that it’s something that no one pays for is wrong. The idea that it will pay for itself because there is more growth is a gamble: this does not necessarily happen. And it turned out anyway a regressive measure“. Then he takes stock of the new stability pact in the EU with a warning to Italy: “Le promises stay out of the financial maneuver. The new European rules – he explains – are slightly more manageable than the past ones, in the sense that there is some flexibility, there is a dialogue possible. The rules serve to prevent us from having surprises on the market level: public debt must not get out of hand“.
“It was right – continues Visco to La Repubblica – raise it as a response to the pandemic and the energy crisis, the methods were not right, in particular the bonus and superbonus structure. The debt has risen up to 155% of GDPand has now dropped to 137, a partially facilitated descent from inflationnot from greater growth which is what is needed for keep debt under control. Looking ahead, there will be the delayed effects of all these interventions over time, and we have the burden of interest. Let’s hope interest rates fall in real terms, but that said, we cannot maintain such a high debt structure, fueling it with continuous deficits. The objective of the stability pact is to keep deficits under control“.
#Visco #Superbonus #big #mistake #debt #hand
