A 'neutral' maneuver for 2027, given the turbulence coming from the energy shock and the financial markets and the need to exit the EU procedure. Thus begins the hunt for resources for the three pillars of the budget law, i.e. 'start tax' for young people, expansion of the Irpef bracket to 33%, home bonus. But the activation of the energy safeguard clause will unlock 14.4 billion euros over the next two years for families, students, businesses, public administrations and infrastructures, with a similar amount for defense.
And if the 2027 maneuver will not be expansive nor will it require a 'tightening', there are margins of around ten billion for 2028 and 2029. This is stated in the Dpfp, the public finance planning document sent by the government to the Chambers last night together with the report on the deviation. From the 143-page text, the "one moment more prudent" approach, evoked yesterday by the Minister of Economy Giancarlo Giorgetti, shines through everywhere: the Italian spread briefly jumped above 130 basis points yesterday, even if it is not the epicenter of the global turbulence, and so is the geopolitical scenario and inflation soared to 4.1%. The differential between programmatic and trend net spending leaves no room for an 'expansionary' maneuver nor does it require a budget correction for 2027.
But "in 2028 there will be around 3.5 billion, 0.3% more net spending, and in 2029 6.5 billion, 0.5% more", explains economist Carlo Cottarelli. The main measures in the pipeline for the next budget law remain, for those under 35, the 5% flat tax on salary increases and the possible extension of the exemption from contributions for hiring. The Irpef which would drop from 43 to 33% between 40,000 and 50,000 euros of income. It will then be the necessary prudence that will establish whether there are margins for some of the parties' wishes, such as the flat tax for shops, or the tax relief on thirteenth wages while the League returns to asking for 'Quota 64' and the flat tax for the self-employed up to 100,000 euros. And then there is the pension issue, whose adjustment to the cost of living requires 10 billion, a probable reason why Italy is among the countries asking for further flexibility from Brussels to take into account the inflationary shock. With the expected deficit below 3% this year "it is believed that the conditions may exist" for exit from the EU procedure for excessive deficit, states the DPFP. In the report to Parliament on the Dpfp, the deviation for defense and energy allowed by the national safeguard clause, a topic which will arrive at Ecofin next week, will allow measures on the energy front for "the use of public transport by students" and, for companies, aimed at supporting energy from renewables, containing energy costs for those most exposed and encouraging decarbonisation, including "a new energy release". Another 14.4 billion will go to strengthen "operational and technological capabilities" in defense with interventions both in current spending, such as personnel and operational needs, and in multi-year investments.
Antonio Misiani, Pd economic manager, speaks of "a set of half-measures that are not decisive" in view of the maneuver, and defines the expected overrun for defense as "a sword of Damocles over the rest", with spending that is "the most significant increase ever in military spending" according to the CGIL. A breath of fresh air, the deviation, lower than the potential allowed by the EU in the spirit of a certain caution: the objective is to provide the "most effective aid without breaking the bank". Because public debt, in the basic forecast of the Dpfp, rises to 138.4% of GDP in 2027 "largely" due to the tail end of the construction bonuses and then falls. But in the adverse energy shock scenario it would mark 138.7% in 2027, and in the spread risk scenario it would mark 138.6 in 2027, 138.5 in 2028 and 137.9 in 2029. Legislative interest spending jumps by almost 10 billion this year, reaching 96.9 billion. And in 2027 it will end up absorbing over 100 billion from the public budget.
