It went well for 2023, but Eurostat’s decision on how to account for the Superbonus is not final. That will arrive in mid-2024 and could be disastrous for public finances. So much so that the Minister of Economy Giancarlo Giorgetti, who was finally waiting for certainties from the European statistical agency on the treatment of bonuses, went into a rage yesterday: almost as if the concerns about the financial and economic picture that today will give to the Cabinet.
Last February Eurostat reclassified the credits linked to 110% as public spending, all in the first year (90 billion euros until 2022). Transferability and discount on the invoice – he established – meant that those credits would certainly be collected and therefore they had to be recorded as a deficit in the years, between 2020 and 2022, in which they were created. Today, however, the Luxembourg agency calls everything into question. Given the size of the stranded tax credits, i.e. not yet enjoyed by the beneficiaries, there is a risk that part of them will be lost. If this were the case, according to Eurostat, we would return to the old criterion: the lower income would be spread over the entire duration of the deduction; essentially, they should be removed from the deficits of previous years and would feed a new mass of additional deficits for all the years of life of the current government. This is not only for the share of stranded credits, but for the entire mass of over one hundred billion euros of tax credits generated with the bonuses. Hence a further cloud of uncertainty over the strategy which in theory should be included in the update of the Economic and Financial Document (NaDef) being launched today and in next month’s Budget law.
In its exchange with Eurostat, Istat assures that the government will intervene again. The risk is precisely that over one hundred billion in spending will disappear from the accounts of the past and will return to weigh until 2027, compromising the deficits just now that the European budget rules and sanctioning procedures will come back into force. This would jeopardize budget margins for years. Paradoxically, after having discouraged the transfer of credits in every way, it could now become urgent for the executive to ensure that all old tax credits are collected. Thus the ghost of the bonus deficit would remain closed, at least largely, in the closets of the past.
There is therefore now one more reason for the confrontation, which has been ongoing for some time, between the Ministry of Economy and the banks holding bonus tax credits for sums of between 80 and 90 billion. The hypothesis at the center of the comparison would be that of an exchange, on a voluntary basis, in which banks transfer tax credits by receiving newly issued government bonds (BTPs) of comparable value from the Treasury. If it were ever carried out, the operation would not be able to mobilize very large sums of debt. But in this way the banks would open up new space in their balance sheets to buy other stranded tax credits and thus help to avoid the scenario ventilated by Eurostat. There are also other objectives in the operation currently being studied. One is to move forward on the challenging debt financing plan for the next few months. But the government’s other objective is to avoid the tendency towards an increase in public debt as a proportion of gross product (GDP) over the next year. If the new BTP issues for the banks took place by 2023, they would in fact be counted against this year’s debt and thus the 2024 debt would be somewhat relieved.
Why it is needed: the slowdown in growth, the growing impact of bonuses and other factors have highlighted the risk that the debt will reverse the downward trend and rise again next year to a little above 141% of GDP. Instead, the Treasury is determined to show plausible containment in the NaDef it will present today. An attempt will be made to concentrate greater placements of BTPs by 2023 even if the operation on the banks does not go through. We are then counting on one or two billion in proceeds from privatizations, not excluding the possibility of selling MPS shares. And a 1% GDP growth is imagined for 2024, considered plausible by the Parliamentary Budget Office, although difficult to achieve now that the economy is in difficulty. It depends on a hypothetical, clear acceleration in the works of the Resilience Plan and on an equally hypothetical, clear recovery in six or nine months.
As for the deficit, in the meeting at the Ministry of Economy on the NaDef figures yesterday afternoon it was believed that it would certainly not be below 5.2% in 2023 and around 4% in 2024. Of course, there are dozens of large foreign investors who are unable to understand the great tangle of the Superbonus. And, not understanding, they stay away from Italy: in fact in the last month the yields of the 10-year BTP have risen by as much as 50 basis points and yesterday the spread with the Bunds reached 192.
2023-09-26 20:26:33
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