Budget Bill: the timetable – from EU flexibility to a vote by 31 December

With the Public Finance Policy Document (DPFP), the government has set out the macroeconomic framework. The budget process is now entering the phase of implementing measures, with a tight schedule playing out on two fronts. The first is the parliamentary front: the Budget Bill will be submitted to Parliament in the second half of October, and its scrutiny will take place throughout November and December. The second is the European front, where Italia is seeking additional leeway for energy and defence.

The first meeting is on 9 October, with the Ecofin meeting in Luxembourg. The government has decided to follow up on the request sent to Brussels to activate the flexibility clause, despite not having exited the excessive deficit procedure. The Commission will have to verify, as stated in the Dpfp, that ‘exceptional circumstances exist’ and assess the impact on the accounts. It will also have to ascertain, through a debt sustainability analysis, whether this is compatible with medium-term fiscal sustainability. Also on the ministers’ agenda is the request for further leeway regarding the effect of inflation on net expenditure, put forward by Rome and other countries.

By 15 October, the government must submit the Budget Policy Document (DPB) to the Commission. It is a more streamlined version of the DPFP which, in addition to the objectives, sets out the framework of the budget and the financial impact of the main measures. Around the same time, on 15 and 16 October, the flexibility dossier will be raised at the highest level: at the European Council in Brussels, a group of heads of government, including Giorgia Meloni, is expected to renew the request.

By 20 October, it is the turn of the Council of Ministers to approve the draft budget bill and forward it to Parliament, thereby launching the budget session. The deadline is indicative: it often takes several days between Palazzo Chigi giving the go-ahead and the text reaching Parliament. On 21 October, Eurostat will publish the deficit figures based on the Istat report. The Commission will then formally assess whether Italy can exit the procedure on the basis of those figures.

In November, the European process enters its decisive phase. On the 9th, Italy’s request to activate the clause returns to Ecofin, following the Commission’s proposal, and the Council must adopt the specific recommendation by a qualified majority. On the 17th, Brussels will publish its autumn forecasts on growth and public finances in the euro area. On the 24th, as part of the European Semester, opinions will be issued on the budgetary documents of the euro area countries, including Italia.