The cutting the tax wedge must be confirmed. This is supported by the Minister of Economy and Finance Giancarlo Giorgetti, but one of Matteo Salvini’s priorities remains on the table, that is share 41 which for the moment will have to make room for the measure to reduce the tax burden. The project envisaged the possibility of retiring with 41 years of contributions regardless of age, but it seems that this is not possible. Also because pressure comes from abroad, since Italy cannot afford to reach the retirement age, in light of the costs that have been caused by the quota of 100. Yesterday was contrasted and the spread rose up to 150 basis points, while the yield on 10-year BTPs exceeded 4%. Meloni and Giorgetti are betting everything on cutting the tax wedge, which should be worth a total of 10 billion euros. Half a point of GDP appears to be needed to cover the payroll relief, setting the programmatic bar at 4%. The maneuver must also take into account the interventions that are foreseen on the Irpef and the birth package. All issues that will be subject to negotiations with Brussels, which will come to fruition in September.
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The shadow of the infringement procedure
The other important date for Italy is June 19th, when a debt infringement procedure is expected for Italy, together with other countries. The idea is circulating in the corridors of Palazzo Chigi that the positive result of the Brothers of Italy cannot be ignored by the officials of the European Commission. The Prime Minister, Giorgia Meloni, who has already expressed her support for the re-election of Ursula von der Leyen, feels legitimized to negotiate wider margins on the correction of Italian public finances. This strategy has been carefully researched and planned. The recall from Brussels is not a surprise, given the complex European economic context. Many EU member countries are facing similar challenges and trying to negotiate more favorable conditions to revive their economies without it compromise fiscal stability.
