Giorgetti promotes prudence in the 2027 budget, thanks to the national safeguard clause

For 2027 "the need for a budget correction would not emerge", i.e. a spending cut or an increase in revenue, also because the "slight overrun" compared to the primary spending ceilings agreed with the EU "would be entirely absorbed by the activation of the national safeguard clause". Only afterwards, "in 2028 and 2029, would budgetary space become available for a moderately expansionary manoeuvre". These few lines, written on page 59 of the budget planning document sent by the Government to the Chambers on the night between Friday and Saturday, illustrate with some effectiveness the reasons for the additional dose of prudence promoted on Friday evening by Giancarlo Giorgetti. Compared to the hypotheses of a month ago, "I believe that the approach must be more prudent, because the context requires greater attention", said the Minister of Economy at the press conference, drawing a picture in which many of the needs of a policy expected to be tested in the vote seem to have to give way to those of a public finance grappling with inflation and rising rates: the two worst news for a country with high debt.

The point arises from the trajectory of net spending, the limit on expenditure (not counting passive interest, EU transfers and co-financing, cyclical anti-unemployment subsidies and one-off measures) agreed with the Commission to keep the debt at bay. The debate on the escape clause has overshadowed it a bit in recent days. But the spending rule remains crucial for ordinary maneuvering. And there, the Document says, the margins are future and moderate. To measure them, it is enough to calculate the distance between the annual increases in net spending under current legislation and the limits set in the Structural Budget Plan: it is approximately 3.3-3.5 billion in 2028 and a further 2.5-3 in the following year.

The increase from 50 thousand to 60 thousand euros in the income threshold for the Irpef rate at 33% (2.7 billion), the replication of the flat taxes on contractual increases, shifts, night, holidays and productivity (2.6 billion), the flat tax for increases for young people, the refinancing of the health fund and the other measures hypothesized in the (theoretical) debate on the "electoral maneuver" will therefore have to find full coverage in weeks to make room without exceeding the expected deficit net of the clause and spending ceilings. Slightly less pressing problems are raised by the structural transformation of the car tax cut, which for 2027 is based on a portion of the savings from Pnrr. What remains of the Plan's free funds will be able to lend a hand to the rest: not to everything, however, given the estimates of between 2 and 4 billion that have circulated so far. Last year too, for the first time in a long time, the budget did not provide for an additional deficit in the first year: but the elections were further away. And the extradeficit of the escape clause? Its help on the budget, with the obvious exception of the energy and defense measures, according to the document, is marginal: by taking on some outputs already foreseen by the trends, the clause "reabsorbs" in full the "slight overrun" of the spending ceilings on the horizon in 2027. And in doing so, it avoids the budget from having to deal with correcting the accounts. But it doesn't appear to free up additional space.

The impact on the economy does not appear enormous either. In the measure detailed by the Government in the report on the deviation which will be voted on 13 October after the Chamber has concluded its work on the electoral law, the clause offers around 14.4 billion additional deficit for next year, and the same amount for 2028. But the growth objectives set in the DPFP add only 0.2% to the increase in GDP in 2027, which goes to +0.8% from +0.6% trend, and a decimal to that of the following year (at +0.9% from +0.8% trend). The data is explained by the conservative nature of the macroeconomic models of the Ministry of Economy, which apply light multipliers to spending; and, precisely, with the use planned by the Government for this deficit, which in the part destined to finance measures already foreseen by the trends (i.e. by the budget with current legislation) will not give a further boost to the GDP. The greater deficit, however, postpones the start of the decline in the debt-to-GDP ratio to 2028, while the bond markets are shaken by contemporary blows from inflation, expectations of further rate increases and waves of public and private issues.

The consequences of the new scenario can already be seen in the trends of the Dpfp, which, even without considering new measures, indicate for the next three years an increase of 40.8 billion in overall public spending and of 14.7 billion in the cost of interests (with the extra-trade deficit they become 16.3) compared to the calculations of the April Dpf. Revenue, for their part, grew by 29.5 billion. All without considering new, possible further increases in inflation, which have already emerged from the data at the end of September. The accounting criteria adopted in Brussels do not affect these dynamics. Which are instead decisive for the management of public finance constraints at the center of the negotiations between Rome and the Commission. With the Dpfp, Italy confirms the objective of exiting the excessive deficit procedure in 2027, based on the final data for 2026 with a deficit of 2.9%; and it therefore matters that the actual activation of the expenditure from the clause in that same year pushes the commission to exclude the extra-trade deficit from the calculations on the verifications of the 3% ceiling. Net of the exemption for energy and defense, the deficit stops at 2.8% of GDP in 2027 and 2.6% in 2028, therefore remaining at a safe distance from Maastricht. Without the accounting exclusion, reaching 3.4% and 3.2% in the next two years, it would keep Italy in the corrective arm of the EU Pact until 2030, falling below 3% only in 2029 (2.3%).