Surprise! The additional measure on which Europe loudly insisted (led by Minister Padoan and the European Commission Vice President Dombrovskis) in the meeting last Friday will not be applied. Or rather, it will go back to what it was in Matteo Renzi’s initial projects. But only if the E.U. agrees, and that is not confirmed yet.
On Monday, the government let Renzi decide, that is to “let policy prevail on technical considerations,” as imperiously request by Nazareno.
Is €3.4 billion enough to recover the 0.2 percent increase claimed from Brussels? Well, let’s deduct a billion which will be used to finance the industrial revival of the zones affected by the earthquakes. The measures in favor of the earthquake-affected areas do not affect the structural deficit; therefore, they are not covered by the Stability Pact, and voila, the game is done.
So, only €2.4 billion are left. But at the Ministry of Economy and Finance they are convinced, or so they say, that in Europe “there is a positive atmosphere in favor of enlargement of the split payment” — that is, the direct payment local authorities to state coffers, and the Value Added Tax on invoices issued by suppliers. So, without a shot being fired, another slice would be covered, probably €1 billion to €1.5 billion. And the balance would be covered by the typical wildcard entries, those used customarily in these cases: “fight against tax evasion,” or “cuts in ministerial spending.”