Maneuver, from expensive energy to Nadef: hot week for government

Anti-inflation measures for families and against the rise in fuel prices are on the table

From measures against high energy prices to Nadef. A hot week begins for the government called to approve interventions against electricity and fuel increases on Monday And Update note to the Def on Friday with the estimates that will form the basis of the maneuver to be presented by mid-October.

Measures and documents to be drawn up within the narrow path of the uncertain growth prospects, the increases in the spread, the delays of the Pnrr, the burden on the accounts from the superbonus and monetary tightening by the ECB. A puzzle that makes it difficult to find the right solution for drafting the maneuver which, in the government’s hypotheses, should be around 30 billion euros while the certain cash coverage at the moment is just 5.5 billion.

Bills and petrol bonus

The package of measures against the high cost of bills and fuel is expected in the Council of Ministers on Monday. Among the interventions of the decree law are the extension of aid for electricity and gas users, including the so-called bill bonus; the petrol bonus which will be loaded onto the ‘Dedicated to you’ social card; the 5% VAT on gas and the stop to the protected market of domestic customers with a particular focus on the situation of the vulnerable.

Towards new estimates of GDP and accounts

Nadef could revise GDP estimates downwards. Endogenous variables linked to the slowdown in consumption and investments, the stop to the superbonus and the delays in the Pnrr are weighing on growth, but also external factors such as the ECB rate hike which entails 14-15 billion more in debt refinancing costs public, the slowdown of the European economy, led by Germany, and the continuation of the war in Ukraine. In the latest GDP estimates, Istat lowered growth to -0.4% in the second quarter with a change acquired for 2023 of +0.7% against +1% indicated in the April Def. For 2024 the Def foresees 1.5% programmatic. As for the deficit in the spring, the government forecast a level of 4.5% in 2023 and 3.7% in 2024 in relation to GDP; for debt the estimate is 142.1% in 2023 and 141.4% in 2024.

Maneuvering construction site

Wanting to skim the requests of the ministries as much as possible for the maneuver, over 30 billion are needed. The refinancing of the tax wedge cut costs 9 billion euros, the first step of the tax reform by merging the first two rates 4 billion, at least 2 billion are needed for healthcare, at least 4 billion for families and the birth rate, to confirm the pension package ( no adjustments, therefore) 2 billion. Another 6 billion are used for non-deferrable expenses, peacekeeping missions, etc. Confirmation of the preferential taxation on productivity bonuses and fringe benefits of up to 3 thousand euros costs 2 billion; finally, the renewal of public employment contracts for the start-up alone requires at least 2. But the certain coverage at the moment amounts to only 5.5 billion (4 billion in cash obtained from the better result of 2023 and 1.5 billion in cuts from the ministries) .