Thursday, July 25, 2024

Those signs of the “strong forces” that mattered to Palazzo Chigi. In three weeks’ time, Philotto from the Financial Times, Bloomberg, The Economist and CNBC as Rome negotiates overhaul of the EU’s Stability Pact


Small signs, but they should not be underestimated. And they line up one by one to try to understand whether this is just the result of chance or if it hides a possible change of pace in the international establishment’s perception of Italian government. In Shijie Palace, in fact, the series of criticisms and doubts that have reappeared in major European and American economic newspapers in the past three weeks have not gone unnoticed. Since the second week of August, the Financial Times, Bloomberg, CNBC, The Economist and yesterday again the Financial Times have seen the Italian executive’s economic strategy and the long-term sustainability of our public debt questioned. A change of pace occurred after the Council of Ministers decided to impose a tax on additional profits of banks and to intervene in the prices of low-cost airline tickets. Two initiatives that alarmed international investors and found great importance in the specialized press, which is now carefully watching the next moves of the Chigi Palace both in relation to the budget law and in relation to the negotiations under way in Brussels to reform stability before the return of the old (and strict) fiscal rules of pre-Covid into force. On the first of January.

Among the ministers there are those who reject the matter without giving it much importance, convinced that the motivating element is above all the tax on additional bank profits and the ongoing discussion about the new legislation for non-performing (or non-performing) loans. loans, npl). In short, the fear of international investors is that Italy may not provide guarantees on the regulatory framework.

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But there are also those who fear that what happened in August is a signal of the “Brussels bubble” beginning to send signals before the confrontation over the Stability Pact gets to the heart of the matter. In fact, the meeting of EU Economics and Finance Ministers – Ecofen – is on the agenda for September 15-16 and it will be an opportunity to assess the different positions in this field, with Germany at the helm: penalty takers called up and Italy hoping to follow A more flexible approach. Moreover, the question will be one of the topics on the bilateral table that Giorgia Meloni will hold today in Athens with Greek Prime Minister Kyriakos Mitsotakis (Greece, which has the first public debt of the European Union, followed by Italy, Portugal, Spain and France, has positions very close to ours on this point ). In short, there are also those who fear that the August sequence is not only the result of international investor concerns, but also a thermometer for something else. On the other hand, in Italy in the past the governments in office were strongly conditioned by external factors.

In Brussels, moreover, reforming the rules governing member states’ budgets intersects with other sensitive games played by Italy. This is after the ratification of the constitution, which will return to parliament in November after a four-month suspension, which was approved by the parliament on July 5. But also the Pnrr front, about which the Financial Times once again expressed its doubts yesterday. The London City newspaper wrote that Italy was “struggling to keep up with the demanding timetable for reforms and investment agreed with Brussels in 2021, especially since Meloni’s right-wing coalition came into government last year”. Precisely this, according to the Financial Times, would have “revived old fears about Rome’s ability to carry out the promised reforms and use the liquidity obtained effectively”. It is a logic that is not new and has on several occasions – even in direct discussions with the European Union Commission – returned in the Palazzo Chigi to the sender, precisely thanks to the fact that – as Minister Rafael Vito mentioned last week before the Parliament present at the Rimini meeting – I inherited the current executive power The Pnrr plan written by the two previous governments, however, from December 31, Italy will find that it has received all the financing expected for 2023 (the total amount that Brussels will pay does not change, only the distribution between the third and fourth installments).

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