Stability Pact, the extraordinary Ecofin meeting will take place from December 18th to 21st. Giorgetti: “Today I’m moving forward”

There is still no agreement on the new stability pact, but we are almost there. The seal should arriveExtraordinary Ecofin Meeting, the formal meeting of finance ministers of the Union countries, from December 18 to 21. “The progress made shows that there is recognition that we are not in a normal situation. There is a war in Europe. “We believe that the new budget rules must be in line with the objectives defined at European level, in particular with the challenges of climate change and in particular with regard to defense,” said the Economy Minister Giancarlo Giorgetti in a written statement released on the sidelines of the Ecofin meeting in Brussels.

According to the German Finance Minister, negotiations on the budget rules ran until 4 a.m. this evening Christian Lindner 92% of the aspects were achieved. His French colleague Bruno Le Maire he spoke of 95%. “There is consensus on protective measures (for debt and deficit reduction – editor’s note), now it is a matter of properly calibrating the space for investments, which are particularly necessary for defense and for which room for maneuver is necessary: “We still have a common understanding of what numbers are sufficient,” Lindner told reporters.

Regarding the requirements for deficit correction, the Federal Minister then stated that “some states are of the opinion that within the framework of the deficit procedure a kind of …” ‘Golden Rule’ for investments: I am convinced that the excessive public deficit (over 3% of GDP) needs to be reduced and is not justified, there is a difference between the preventive dimension and the corrective dimension of the rules and the latter does not require any necessary change the (current) rules that already provide for flexibility”.

The issue that pits the countries of the Union against each other is always the same: there are those who push for a reduction in the deficit and public debt (the so-called frugal countries like Germany), and those who hope for more flexibility of rules and leeway for investments (Italy is one of them).
Countries with a debt of more than 90% of GDP, such as ours, are required to reduce their debt by 1% per year after the deficit returns to less than 3% of GDP (0.5% for countries between 60 and 90% of GDP). ).

According to the latest EU estimates, based on 2023 data, eight euro area countries could probably be on trial for excessive government deficits at the end of June: Belgium, Spain, France, Italy, Latvia, Malta, Slovenia and Slovakia.

Italy, Germany, France and Spain agreed overnight on a quadrilateral agreement on flexibility in correcting excessive deficits when a country is in the European procedure. It is expected that the increased additional debt service burden associated with the sharp increase in interest rates will be taken into account. This is a temporary flexibility for the years 2025-2027. Così The rule of a structural deficit/GDP cut of 0.5% (as in the previous Stability Pact) would remain in place for the countries subject to excessive government deficit proceedings, but the weight of debt repayment spending is up the limited part relating to the impact of the interest rate increase is taken into account when defining the reduction in the deficit. Therefore, structurally it will not be more than 0.5% of GDP, but less; for our country, a tenth of a percentage point of GDP is worth around 2 billion euros at 2023 values.

Minister Giorgetti then told journalists that “the legal definition of what was agreed still deserves days and weeks of work.” He then added: “If the agreement for a transitional period were to become final, in our view it would be in line with European aspirations: we agree that we must ensure the sustainability of the budget, we have accepted the protective measures proposed by Germany .” and if the heads of state and government confirm on Thursday (at the meeting of the European Council – editor’s note) that we must continue to maintain the ambition of the EU strategies, the standards (for public finances) must be adjusted .” For Giorgetti, the current rules would be better than a bad agreement.

Regarding the ESM, which was not only signed by Italy, he said: “It is not in my hands, it is in the hands of the supreme body. According to the republican constitution, the Chamber of Deputies decides. On December 14th I was informed that the conference of group leaders had scheduled the discussion.

The Italian document was approved in the Senate Budget Committee

Initiate further reflection with the relevant European institutions on the need to overcome a framework guide EU economy based on compliance with the parameters of 3% of the deficit and 60% of the debt”. This is provided for, among other things, by the resolution on the Stability Pact passed by the Senate Budget Committee. The document commits the government to continue negotiations at EU level and, “in the event of no agreement at European level by the end of 2023,” to support “provided the conditions are met, the extension of the pact’s general safeguard clause up to a proposal that would Approval received from the member states.

Other commitments include reconciling the “needs for gradual and realistic debt reduction with the provision of sufficient fiscal space for measures to stabilize the economic cycle and for structural measures to support economic growth and sustainable development in the medium and long term”. Equilibrium of the balance of payments”. In addition, it is requested that “the content and actual methods of determining the technical path be better clarified in order to guide the dialogue with Member States in order to identify the path to contain the expenditure aggregate and the associated debt/GDP reduction. “It is also understood that the determination of the methods for implementing the plan is the responsibility of the government and parliament of the Member State.”

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