Italië lijkt op weg om begrotingstekort in 2007 weer binnen bepalingen Stabiliteitspact te krijgen (en)

The European Commission considers that, subject to a full implementation of the 2006 budget and the adoption of adequate corrective measures for next year, Italy is on track to correct its excessive deficit by 2007 as recommended by the Council in July 2005. While it does not appear necessary to move to subsequent steps in the excessive deficit procedure at present, the Commission will continue to monitor the situation closely, also in the light of the significant uncertainties surrounding the budgetary evolution.

Separately, the Commission has also examined Italy's updated pluriannual stability programme. In addition to correcting the excessive deficit, Italy should spell out the broad measures underpinning the progress towards a balanced budget in the medium-term, ensure a more rapid decline in the debt-to-GDP ratio and improve the budgetary process.

" We appreciate the efforts made by Italy with the 2006 budget law and welcome the commitment to further fiscal adjustment. We will continue to monitor closely the situation to verify that the budget is implemented fully and effectively. Italy needs to pursue vigorously the path of budgetary consolidation and restore a level of primary surplus that enables a rapid reduction in the high government debt ", said Joaquín Almunia i, Commissioner for Economic and Monetary Affairs.

Excessive deficit procedure

On 28 July 2005, the Council placed Italy in excessive deficit and requested the government to take measures, before 12 January 2006, to bring the deficit below 3% of GDP by 2007 at the latest. Specifically, the Council recommended to Italy to " implement with rigour the 2005 budget " and to " take the necessary measures to ensure a cumulative reduction in the cyclically-adjusted deficit, net of one-off and other temporary measures, of at least 1.6% of GDP over 2006-2007 relative to its level in 2005, with at least half of its correction taking place in 2006". The Council also requested Italy to " ensure that the government gross debt ratio diminishes sufficiently and approaches the reference value at a satisfactory pace... ". In addition, the Council invited Italy to ensure progress towards a balanced budget in the medium term, and to " further improve the collection and processing of government data ".

The communication to the Council adopted by the Commission today concludes that Italy has taken action consistent with the Council recommendations. In particular, the 2005 deficit target (4.3% of GDP) appears to have been achieved; the full planned effect of the 2006 budget law, provided that GDP growth develops as expected, would deliver the structural adjustment required by the Council (see table below); the deficit target for 2007 has been set below 3% of GDP; the debt is planned to return on a declining path; and, statistics have improved.

The Commission therefore considers that no further steps under the excessive deficit procedure are needed at present. At the same time, the Commission notes that there are significant uncertainties surrounding budgetary outcomes and that the correction of the excessive deficit by 2007 crucially depends upon a full and effective implementation of the 2006 budget and the adoption of further substantial corrective measures for 2007. The Commission will continue to monitor closely budgetary developments in Italy in the coming months, in particular in the light of the fragile situation of the public finances.

Stability Programme 2005-2009

Italy submitted an update of its stability programme for the period 2005-2009 on 23 December 2005. The programme aims at bringing the deficit below 3% of GDP by 2007 and at pursuing further fiscal consolidation towards a medium-term objective of a balanced budget in the following years. The programme also projects a fall in the debt ratio from 108½% of GDP in 2005 to slightly below 102% in 2009.

The stability programme is based on a plausible macroeconomic scenario that assumes GDP growth in 2006 and 2007 in line with the Commission services' forecasts of last November. The slight downward revision of Italy's GDP growth in 2006 in yesterday's interim forecasts (from 1.5% to 1.3%) does not significantly alter the assessment of the programme.

If achieved, the budgetary targets in the programme would ensure a sufficient safety margin against breaching the 3% of GDP reference value from 2009. However, the medium-term objective will not be achieved by the end of the programme's period, and no future target date is indicated. As regards long-term sustainability, Italy is considered to be at medium risk from the projected budgetary costs of ageing populations.

The Commission considers that, in addition to achieving the structural consolidation needed in 2006-2007 to correct the excessive deficit, it would be appropriate for Italy to: spell out the broad budgetary measures that underpin the adjustment in the years beyond 2007 and strengthen the adjustment towards a balanced budget; ensure a more rapid decline in the debt-to-GDP ratio; and improve the budgetary process.

The Commission's assessment of the updated stability programme is available at:

http://europa.eu.int/comm/economy_finance/about/activities/sgp/year/year20052006_en.htm

The Commission communication is available at:

http://www.europa.eu.int/comm/economy_finance/about/activities/sgp/edp/edpit_en.htm

Comparison of key macroeconomic and budgetary projections*