Europe and Italy are a bit like a car that hardly starts: industrial production in decline (euro -2%area, Italy -7%), beaten competitiveness and a public debt that looks like a mountain to climb without oxygen. In Italy the debt exceeded 3000 billion euros And the cost for interest is dangerously approaching 100 billion euros per year. While countries like China run with the wind in the stern, we find ourselves looking at the tank almost empty. Mario Draghithe man who saved the euro with a “Whatever It Takes”, has delivered a report to Von der Leyen on “The future of European competitiveness”, in which he says that 800 billion a year are needed to restart the Europe, equivalent to more than 100 billion per year only for Italy. Too bad that our country, with such a high public debt, certainly cannot increase it to finance new investments. So what to do? A new payment tool could be introduced that we will call sire, an acronym for “integrated tax saving tool”.
What is the Sire
How the Sire works
The first function of this card is therefore the possibility of transferring euros through transfers, transformed into this new account unit, which can be used to make payments, like any payment card of your bank or post office. I can also pay for taxes after two yearswith the advantage that in the meantime the annual increase determines a real “tax saving”. Over time, it could only produce a lower tax revenue, when someone decides to use it to pay (or reduce) taxes, but thanks to the annual return of 3% that exempted, many will prefer to keep it as a reserve of value rather than spend it.
However, there is another possible function: The state, in turn, could use this new unit of account to finance public spending and make productive investments. For example, if you want to build a new 100 million euro hospital, today it should issue new BTPs to 10 years, which increase the debt and eventually involve a total expenditure of 150 million euros due to interest. While instead paying with 100 million sires, it does not increase the debt and could only have a lower tax revenue after two years, which, however, due to the incentive of 3%, may be less or never arrive. And there is more: the state could use this unit of account to give support to SMEs and families in difficulty, offering subsidized funding through this tool obviously the sire is only valid in Italy, but it can always be sold to a bank to receive Euros valid all over the world.
Advantages and disadvantages of the Sire
The relieving tax credit is not to be considered as debt, because it is a simple and future reduction in tax revenue. When the state uses this new account of account, it is not increasing its public debt, but transforms a part into a sire, which is an exchange tool that circulates in the real economy, giving a nice push to consumption and investments. And thanks to the annual increase (that 3% interest rate), the purchasing power of savers increases, protecting them from inflation.
But it does not even increase the deficit, because thanks to the annual increase by 3%, the probability that this tool becomes a cost for the state is very low, because it is more likely to be tesaurized or circulated in the economy, rather than spent on Reduce taxes. In practice, the state does not have the certainty of having to “pay” the sire in terms of less revenue, therefore it must not consider it even in the calculation of the deficit when it is issued.
Result? For example, if the government created 100 billion in this new account of account per year to finance public investments, the debt and the deficit would not increase, but the GDP yes. Of course, if everyone ran to move their euros from bank accounts to this new credit card, the reserves of banks at the Bank of Italy (those beautiful 300-400 billion euros that are there to take dust) could be exhausted in a beat an eye on. However, it is sufficient to put a roof to the transfers, for example 10 thousand euros each, to prevent the banking system from going on tilt. And there is more: Banks could manage these new accountsas if they were the titles. Thus, in addition to retaining customers, commissions and commissions are pocked, transforming a potential problem into an opportunity. The banks earn, savers are happy and the system remains in balance. Why not try?
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