Italy’s reply to Europe’s request for additional help — which, unofficially, is a firm no and, officially, Commission Vice President Dombrovskis and Economics Commissioner Moscovici are still “looking into” — is already in the trash. It was turned into confetti a few hours after it was sent, after Brussels gave it the business. It will be made official in February. But Brussels is already amply aware of the mild agreement reached in Rome.
The idea of a €3.4 billion discount as requested, by taking into account the expenses for the earthquake that occurred in January, is out of the question. The E.U. already said no. There will be some savings, but not as much as the half that was hoped for, only if the final 2016 budget, to be released in a month, will show that things have gone a bit better than expected and that GDP grew at least 0.8 percent more than budgeted.
As was announced in Italy’s request letter, three-fourths of the savings will come from new revenues and one-fourth from lowered expenses. More revenue means increased excise taxes: 2 cents more on gasoline for a total of €800 million, plus tobacco and others that will add up to €1.5 billion.