EU irritation over the Italian premier’s propaganda plans which are now at risk of causing the Recovery fund to fade
There is some irritation on the high floors of the European Commission in reading the Italian press reviews and the latest releases of the Prime Minister, Giuseppe Conte. Ursula von der Leyen and the commissioners of other countries did not like the only proposal that ran away from the Italian general states, which is that of a reduction in the VAT rates to be included in the plan to be presented in Brussels by next October 15, nor the debate that has sparked in the ranks of the majority on what other taxes could be lowered by using the cuckoo of lost funds and loans granted by the recovery plan. And even more: just those who wanted to help Italy and for weeks conducted a complicated negotiation with the most opposed countries (Austria, Sweden, Denmark and Holland and in part those of Visegrad) are strongly irritated with the Italian government that is providing on a silver plate the arguments useful to blow up the entire Next Generation fund, which needs the unanimity of the 27 to be unlocked.
Because the propaganda spread by large hands from Palazzo Chigi and which culminated yesterday in the indecent video by Istituto luce on the general states of the Economy, is just the best way to say goodbye beforehand in advance to the 153 billion euros (this is the real written figure in the working documents) designed for Italy between grants (96.3 billion) and loans (56.7 billion) for the next few years. The only thing that cannot be done with those funds is in fact the only one that emerged from Conte’s plans to scratch the electorate’s belly a little: the reduction of taxes. That hypothesis is already reinforcing the opposition of those countries that said they were certain that countries like Italy would use any help from cicadas, in fact throwing it away. It is the exact opposite of von der Leyen’s work, as an MEP – Massimiliano Smeriglio – who has always been among the politicians closest to the secretary of the Democratic Party, Nicola Zingaretti, explains with intellectual honesty in an interview with Il Tempo.
According to the working documents of the European Commission, the “Recovery” or “Next generation” fund package should serve to buffer the fall of the GDP of the most economically battered countries (which are precisely Italy and Spain), to avoid dragging the whole old continent in a long recession that would still be avoidable. And the only way to do it is in a small part to buffer the fall with compensation and in the majority (100% of direct contributions and 50% of loans) to allow investments that are able to attract other private individuals and to raise depressed economies in a time relatively short that could make you forget the big hit taken in 2020. The sectors envisaged in the commission’s plans are many, and in the lead the tourism sector that has suffered the greatest damage. Then trade, renewable energies, the industrial system, digital technology, construction, mobility, including alternative mobility, the agricultural and health sectors. Compensation and investments, with a particular eye for the latter. Do not shake the traditional public budgets as it would be a structural intervention on the tax department that would have nothing to do with what happened. Taxes can be lowered by acting on the ordinary leverage of public budgets, compensating for the lower income that would result from a cut in ordinary expenses. And given the situation of the economy, it is the last of the maneuvers that Italy would have in this situation with an exponential growth in the relationship between debt and GDP which from 2021 should instead begin its path of return with the risk (for us, but for the EU the duty) if anything to raise taxes or to carry out extraordinary operations such as the breezy balance sheet.
All this is well known to the Prime Minister, who has participated in the European summits albeit remotely listening to the resistance of some countries and who should have read the documentation that the Sherpas had prepared, first of all the 54 pages of simulation on the use of the extraordinary € 750 billion that will be added to the EU’s multiannual budget. For this reason it is serious that instead of thinking about building that important though not immediate possibility for the Italian economy, Conte launched himself into the small cabotage of a permanent electoral campaign thinking of his rise in opinion polls and a summer where propaganda will be the mistress in view of the regional and administrative elections of September. Whatever he says, his government has managed the health crisis with many shadows and errors (it is no coincidence that we are the fourth country in the world by number of coronavirus deaths, the worst in relation to infections), it has perhaps done worse in the management of first part of the economic crisis thanks to the inability of those who had to stop the bleeding, and now it risks giving in this way the last and dramatic negative test.