Very briefly I would like to express a brief reflection on financial maneuver. First of all, I agree with the owner of this newspaper according to whom this is not at all a socialist maneuver, nor a series of measures that have anything to do with Javier Milei’s liberalism. In reality, as he himself recalled Nicola Porrothe most relevant element on a general level is the attempt to reduce the deficit within acceptable limitsavoiding continuing on the crazy line followed above all by the Giallorossi government led by Giuseppe Conte.
This is a choice forced by the need, which is often not emphasized enough in the political debate, to keep the growth of our public debt within a trajectory that reassures the markets, i.e. the multiplicity of subjects who lend us the money to refinance a burden that is about to reach three trillion euros. Well, in order to make the management of this sustainable colossal ballastinvestors need to be certain that the Italian Treasury is able to pay the relevant interests in an indefinite time, adopting an absolutely prudential line of public spending, unlike those who have ruined the accounts with citizen incomes and crazy bonuses buildings that even gave additional money to those who renovated their properties with taxpayer money.
Furthermore, the manoeuvre, aka Budget Law, contains a typical attitude of our policy, namely that of providing revenue deriving from one-off measures to cover future current expenses, or lower revenues through tax relief. This is, in particular, the case of the agreement that the Meloni executive reached with the banks and insurance companies for get some sort of 3.5 billion loan without – because this is what it is about – through an advance on taxes that the companies themselves would have paid in any case in the future.
However, this is an obvious ploy on the part of the government, which correctly wanted to avoid introducing a Bolshevik-style retroactive levy – which the left-wing opposition would like so much – but which when the possible aforementioned current expenditure comes into force it will be necessary to find other “patches” to ensure coverage. Ditto with potatoes with the controversial agreed biennial budget. Also in this case the possibility was raised, in the event of a success of the measure, of using the increased revenues to lighten taxation for those middle-upper classes currently excluded from the maneuver. Classes which, it should be underlined, will suffer a strong reduction in the related tax deductions starting from 2025, again in compliance with the non-retroactivity of tax rules. And since it is not certain that this agreement will produce the expected increase in revenue in the future, all the benefits connected to it will have to find additional sources of financing.
On the other hand, in a country where anyone who tries to cut public spending even slightly risks being politically electrocuted (although our welfare overall costs us an arm and a leg, with social security spending by far the highest ‘Europe), faced with such a public finance framework, characterized by a very short blanketI believe that we should not reasonably have expected more than this. In this sense, the distance that still separates us from Milei’s Argentina is even greater than the considerable distance characterized by the Atlantic Ocean.
Claudio Romiti, 19 October 2024
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The article Maneuver, government struggling with crazy spending: it’s little, but it’s already something comes from Nicola Porro.