Brussels, 19 June 2024 – La EU Commission will open one procedure for excessive deficit For Italy, France, Belgium, Hungary, Malta, Poland and Slovakia. According to Brussels, the seven countries have an excessive deficit situation because above 3% of GDP. The community executive then assessed that Romania had not taken effective action to correct the deficit requested by the Council.
Public debt forecasts
The Commission today adopted its European Semester spring package, which also includes an ‘Omnibus Report’ on excessive deficit procedures. The report covers 10 Member States that recorded a deficit above 3% in 2023, plus two (Slovenia and Finland) which are expected to exceed the deficit in 2024. The Commission concluded that for five of these countries (Czech Republic, Estonia, Finland, Slovenia and Spain) the deficit criterion can still be considered respected.
For the other seven countries (including Italy), the Commission will ask the EU Council in mid-July to open the excessive deficit procedure. The countries concerned will have to present their deficit recovery plans by September 20thand the Commission will then decide its recommendations on adjustment paths in November.
What it means for Italy
The Parliamentary Budget Office today notes “the need for an ambitious and long-term consolidation will require the identification of economic policy priorities”. And recalls that, based on the new EU Pact, Italy will have to cut the annual deficit by 0.5-0.6% of GDP. The correction will be approx 10-12 billion, on a seven-year path, to which over 20 billion euros will have to be added to refinance all the measures launched last year. The gross maneuver should therefore be equal to 32 billion (20 to be found with equivalent cuts and/or savings or shifts of other expenses and 10 from cutting the deficit).
Giorgetti: “Infringement procedure was expected”
“The infringement procedure is not news, was widely expected, we already said a year ago. On the other hand, with the boom in deficit linked to the exceptional measures we certainly couldn’t think of staying below 3%”, says the Minister of Economy, Giancarlo Giorgetti. “We have a path, started from the beginning of the government, responsible for sustainable public finance, appreciated by the markets and European institutions – he adds -. Let’s see when it arrives, but we have made various hypotheses. Let’s see the most favorable ones and the less favorable ones.”
The Minister of Economy Giancarlo Giorgetti (Ansa)
In view of the manoeuvre, Giorgetti explains: “We will have to be very selective, favor the most useful policies and evaluate those that are less useful. It is a great job that we will have to do in the coming months”.
