Giorgetti: 'Defence weighs on the accounts but no sacrifices or corrective manoeuvres are needed'

The international commitments on the relaunch of defence investments 'imply a different evolution of public accounts' and the main effort asked of the next manoeuvre will be to manage this 'new fact' in a 'gradual' manner without 'compromising our economic and political policy objectives in a broader sense'.

In keeping with tradition, in his closing speech at the Forum Ambrosetti in Cernobbio Giancarlo Giorgetti begins by outlining the key features of the budget law that will occupy the government's agenda in the coming weeks. And, as is his custom, the Minister for the Economy carefully avoids rattling off anticipations on individual measures, and is ironic about the 'manovramercato that comes along with the football market in August': because, he says, 'I like to promise little and do a lot, not the other way around'.

The cornerstones of the challenges facing public finance, however, are clear. Despite a growth slowed down by geopolitical chaos and trade wars (Giorgetti is counting on 'confirming' in the public finance programme the +0.6% forecast in April), 'this year with the manoeuvre there is no need for sacrifices or corrections in the accounts, which are going as we had exactly predicted'. In fact, hopes are for a deficit even lower than the 3.3 per cent of GDP put on the calendar for this year in April, and it is precisely from this lowering in the multi-year deficit line that important help could come in the attempt to combine interventions for the middle class and the start of the upward path of military spending.

Much will depend on the possibility of actually achieving an early exit from the excessive deficit procedure, which would allow Italy to activate the national safeguard clause that releases defence investments from the Pact as early as next year. Even if the prospect does not excite the holder of the accounts: 'I am a politician and I live among the people,' he explained to the audience of businessmen and managers gathered on the shores of Lake Como, 'and I know that it is difficult to explain to ordinary people that the Pact can be waived for defence and not for other expenditure.

In any case, the line of the next manoeuvre will also be inspired by the usual canons of 'seriousness, responsibility and prudence' that Giorgetti has pursued so far with a stubbornness that, he claims, 'is also paying important dividends for businesses and credit companies'. The data on spreads and yields say so, and the choral expectations of new rating improvements suggest so (the next appointment is for 19 September with Fitch, which today gives our debt a triple B rating with a positive outlook), even if so much confidence struggles to transfer to more everyday markets, those of Italians' private consumption. "In recent years we have given back almost 20 billion as a reduction in the tax and contribution burden on low and medium incomes," Giorgetti reconstructs, "but in the meantime the propensity to save has also increased, in my opinion fuelled by the fears produced by the daily images of military and trade wars.