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January 29, 2020 Italy "needs a credible medium-term fiscal consolidation plan". The judgment is contained in the final note compiled by the inspectors of the International Monetary Fund at the end of the annual mission in our country. "The debt," write the economists of the Washington Institute, "is expected to remain high, close to 135% of GDP, in the medium term and to increase in the long run due to spending on pensions. If adverse shocks materialize" , the document warns, "debt would grow faster and faster. Therefore, it is highly advisable to take advantage of the current low interest rates to develop a credible medium-term consolidation plan". The target, to be achieved "gradual and balanced", should be an overall surplus of 0.5% of GDP in 2025.

"Italy is the country with the lowest growth forecasts for the whole Union", says the International Monetary Fund, which considers urgent structural reforms. The GDP will grow by 0.5% for 2020 and by 0.6% for the next few years, EU tail light

2020 deficit at 2.4%, the debt will remain at 135%
"We expect the deficit to be around 2.4% of GDP in 2020" and then slightly down, while the debt will remain close to 135% in the medium term, before rising in the long term due to pension spending. It is written in the IMF article iv report on Italy. which opens up a "neutral" balance this year, and then "take advantage of the current low interest rates to implement a credible medium-term consolidation" that leads to a half-point surplus by 2025.

On pensions done a lot but with Quota 100 the expenditure remains high
"Italy has done more than most other countries to reform its pension system, generating savings in the very long term. But in the next few decades, spending pressures are expected to increase considerably." "It is important to preserve the indexation of retirement age to life expectancy, to ensure actuarial fairness for early retirements and to adjust pension parameters to ensure their convenience," reads the document, which notes how the introduction of Quota 100 has "increased spending and created a discontinuity in retirement age."

Citizenship income must be changed
"The Citizenship Income program is aimed at the most vulnerable. However, the benefit is well above the international benchmarks; it decreases too quickly depending on the size of the family, penalizing the largest and poorest nuclei; moreover, it is less abruptly if you accept a job offer, even at low wages. These characteristics should be aligned with international best practices to avoid disincentives to work and conditions of dependence on assistance ". The International Monetary Fund writes this in Article IV.

Citizenship income "penalizes the poorest and most numerous families" and "disincentives the search for a job". I. According to the technicians of the Washington Institute, the tool offers "benefits far superior to equal programs at an international level" and "should be aligned with best practices".

Reforms to strengthen growth and unlock potential
Italy needs a package of structural reforms capable of "strengthening growth" and "unlocking the country's potential". The judgment is contained in the Final Note compiled by the inspectors of the International Monetary Fund at the end of their annual mission. The priorities, reads the document, are two: "liberalize the markets and decentralize wage bargaining". According to Washington Institute technicians, this "would produce real income gains of around 6-7% in a decade." In particular, "realigning wages to productivity at the company level would encourage investment and job creation".

Shift the weight of work taxes on home and consumption
Italy should shift the burden of taxes from work towards real estate, including the first house, and consumption. The judgment is contained in the final note compiled by the inspectors of the International Monetary Fund at the end of the annual mission in our country. The reduction of the tax wedge, which in Italy is approximately 48% against 42% of the EU average, remains the priority. Inspectors appreciate the 0.2-0.3% cut in 2020-2021 envisaged by the government and note that "a more ambitious reduction could cost 2% of GDP but would be offset by a significant enlargement of the tax base", for the which "there is considerable space", including through "the fight against tax evasion".

IMF, MODEST WEDGE CUTTING, MORE AMBITIOUS WITH EXPANDABLE BASE EXPANSION

Streamline tax expenses

(Il Sole 24 Ore Radiocor Plus) - Rome, Jan 29 - "The wedge
Italian average labor tax is around 48% compared
at an EU average of around 42%. The government plan reduces
modestly the tax wedge of 0.2-0.3% of GDP in the
2020-21 period. A more ambitious reduction towards the average
Europe could cost 2% of GDP, which it should be
compensated by a significant expansion of the base
taxable. "The IMF writes in Article IV, recommending
that "the tax system is being improved to promote the
growth and participation of the workforce, benefiting
families with medium-low incomes. "The Fund notes that
"there is ample margin" to expand the tax base,
"by rationalizing the tax expenses of the personal income tax, in
especially those not targeted or that discouraged the offer
of work; VAT; updating the evaluation system of the
property that weighs disproportionately on families
poorer ". Adds the fight against tax evasion.
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(RADIOCOR) 29-01-20 11:08:13 (0223) PA 5 NNNN