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November 07, 2019 Decided increase in Italian debt in the autumn EU forecasts: in 2019 it will rise to 136.2%, and in 2020 to 136.8%. Brussels is thus revising up the spring estimates which gave it to 133.7% and 135.2%. The main causes are "weak growth in nominal GDP, deterioration in the primary surplus" and "rising cost of past measures", ie citizenship income and a share of 100.

The EU Commission therefore expects Italy to have a "stable" deficit of 2.2% for 2019 and a slight increase to 2.3% in 2020. "Government spending increases due to the introduction of citizenship income and measures that expand the possibility of early retirement ", given that both measures will only show their full annual cost starting in 2020", writes Brussels. The spring forecast deficit figures were much higher (2.5% and 3.5%), but still did not incorporate the summer budget correction.

According to economic forecasts, the Italian economy is "stalled since the beginning of 2018 and still shows no significant signs of recovery". The estimate for the 2019 GDP (+ 0.1%) remains unchanged compared to the summer, and that on the 2020 GDP is cut instead (from + 0.7% to + 0.4%). In 2020 there is a "modest" recovery in growth, "thanks to external demand and household spending, which, however, is attenuated by the undeterioration labor market". Italy is confirmed last in Europe both in 2019 and in 2020.

Risks to the downside for growth
"The risks on the growth prospects remain anchored to the downside. Italy is exposed to a further deterioration of the global economy and to the potential worsening of the financing conditions, due to its high debt", notes the Commission.

"The labor market is deteriorating"
"The labor market has remained resilient in the face of the recent economic slowdown, but the latest figures point to a deterioration" writes the Commission. The drop in productivity is likely to push employers to cut jobs or resort to temporary contracts ", and the" number of unemployed will hardly fall even due to the new citizenship income that will progressively induce more people to register as unemployed ".

Doubts on revenue from anti-evasion measures
The EU Commission expresses doubts about the proceeds of the anti-evasion measures envisaged by the government in the 2020 maneuver. "It is expected that the additional measures against tax fraud foreseen in the 2020 maneuver will also support the" government's revenue, "even if the related revenue is subject to some uncertainty, "writes Brussels.

"A new spending review together with a cut in public spending of 1 billion, planned as a safeguard clause, will help to contain the increase in spending", the committee noted, giving substantially a positive judgment of the measure illustrated by Minister Roberto Gualtieri in the letter sent in Brussels.

Moscovici: maneuver neither rejected nor procedure
"This time there will be neither the rejection of the maneuver nor the opening of a procedure" due to excessive debt, "we do not have two weights and two measures" compared to last year but "the exchange of letters this year has taken place in a another spirit, with another approach, and the debate on the budget cannot be compared ": the commissioner for economic affairs Pierre Moscovici spoke about Italy. "The road ahead is rising - he underlined the European situation - even though the States will continue to grow in the coming years, but moderately. Efforts must be intensified to increase the resilience of our economies and of the Euro zone. Mario Draghi is right, monetary policy alone cannot bring the situation forward when the economy weakens ".

Dombrovskis, those with high debt reduce it with prudent policies
"I ask all EU countries with high levels of debt to pursue prudent fiscal policies and to put their debt levels on a downward path". The vice president of the European Commission, Valdis Dombrovskis, said this, presenting the economic forecasts for the autumn. Italy and Belgium are the only two euro area countries with a debt exceeding 60% of the GDP increasing between 2019 and 2020. France's debt, on the other hand, is stable. Dombrovskis has also appealed "to member states that have fiscal space to use it" to support growth.


"The road ahead is up, even if the States will continue to grow in the next few years, but moderately. Efforts must be intensified to increase the resilience of our economies and the Eurozone. Mario Draghi is right, monetary policy alone is not can bring the situation forward when the economy weakens ". Thus the European Commissioner for Economy Pierre Moscovici presenting the economic forecasts.