IMF: “Tariffs on Chinese cars damage the EU”. Ministries called upon to make cuts worth billions of euros. The decline in house bonuses brings back the risk of black money. The Energy review
Tariffs on electric car imports from China will hurt EU countries. This is what the International Monetary Fund says, which in its latest report, entitled “A recovery below the full European potential”, estimates that Italy, France and Germany would lose 0.18 percent of GDP in five years with additional duties of 25 percent and 0.46 percent with additional duties of 100 percent. After years of the emergence of the undeclared work sector in the construction sector, the black market phenomenon is forcefully returning. The bonus reform will bring various reductions in discounts, which for first homes could drop from 50 to 36%, while for second homes from 36 to 30 percent. A decline that risks increasing the use of alternative routes by Italians, after the high incentives have created a great conflict of interests between the parties involved in these operations, according to what Il Sole 24 Ore reports. The cuts undertaken by the government to finance the new Budget Law also affect the ministries. The Ministry of Economy and Made in Italy will have to save 2.2 billion and over 1.1 billion respectively, 43% of the overall reductions. The Ministry of Transport will have to find a way to reduce spending by 825 million, while that of the University by just over 700 million. The Energy review.
ELECTRIC CAR, IMF: CHINESE DUTIES DAMAGE THE EU
“The impact in Europe of the transition to electric cars in the next five years will be worse for the big three (Italy, France and Germany) if duties are imposed on the entry of Chinese cars into the EU market. The rating comes from the International Monetary Fund
national, in the Economic Outlook dedicated to Europe and with the not very encouraging title, «A recovery below the full European potential», presented on Thursday by the director of the European Department, Alfred Kammer. The IMF recalls that the EU’s climate objectives include a rapid transition towards electric and that currently only 15 percent of total sales in Europe are “fully electric”. This, in a sector increasingly dominated by Chinese manufacturers. IMF economists predict that the market share Chinese in Europe increases of 15 percentage points within five years. A situation that is «parallel to the Japanese experience in the United States in the 1970s», although at a relatively faster pace. The label coined is «EV-shock scenario». The impact of this «electric car shock» on European GDP «is small overall, but significantly heterogeneous between countries. Large countries such as Germany, France and Italy would suffer a cumulative production loss of around 0.15 percent of GDP after five years.” (…). Ultimately, the ones who benefit from the cheaper Chinese electric cars would be the EU countries that do not have a large car production base”, we read in Il Sole 24 Ore.
“However, the results would be worse in terms of GDP with the imposition of duties on Chinese EVs. (…) In the combined region of Germany, France and Italy, the GDP losses for five years are estimated at 0.15 percent without tariffs, 0.18 percent with additional tariffs
reached 25 percent and 0.46 percent with additional duties of 100 percent,” the newspaper continues.
ENERGY, LOWER HOME BONUSES AND BLACK RISK
After years of the emergence of the undeclared work sector in the construction sector, the black market phenomenon is forcefully returning. The bonus reform will bring various reductions in discounts, which for first homes could drop from 50 to 36%, while for second homes from 36 to 30 percent. A decline that risks increasing the use of Italian roads by Italians, after the high incentives have created a great conflict of interests between the parties involved in these operations, according to what Il Sole 24 Ore reports.
“Immediately save the VAT to be included on the invoice (10% for renovations) and the 11% withholding tax on the bank transfer received. And, at a later stage, income taxes. Having in front of you tax discounts which, especially for second homes, are easier to match than in the past; also because they will be decimated by the new trap for deductible expenses. Companies active in the construction industry and their clients will soon find themselves facing this scenario. With easily predictable outcomes. The budget bill, which has just landed in Parliament, after years of the forceful emergence of the undeclared economy in the construction sector, brings the issue of the black economy back into the news (see «Il Sole 24 Ore delMonday» of 21 October). If in the recent past the discount levels were such as to have made the conflict of interests between the parties involved in these operations very strong, now the discounts are lowering and many could look for alternative paths”, we read in Il Sole 24 Ore.
“In perspective, then, things could even get worse, as can be clearly seen from the path defined for home deductions in the coming years. Even if it is not certain that these percentages will be confirmed, those who are planning interventions that could exceed 2026 must be aware of the upcoming reductions: for first homes, in fact, the discount could drop from 50 to 36%, while for second homes the cut could bring the bar even lower, from 36 to 30 percent. (…) the income limits from which the reductions are triggered have been set at over 75 thousand euros. But the new baskets will never exceed 14 thousand euros for incomes up to 100 thousand euros and 8 thousand euros for those above. Naturally, these are the two peaks in the presence of larger families, i.e. with more than two dependent children”, continues the newspaper.
“This suggests that the construction bonuses, which are based on huge works and costs especially in the case of extraordinary maintenance or renovations, will then be destined to occupy all or almost all of the ceiling. Also because, if you read the text of the budget bill carefully (article 2, paragraph 9), the new expenses incurred from 2025 will have to be charged per single installment of the amortization plan. (…) Meanwhile, the first doubts are starting to spread among professionals, for example, on the priority with which deductible expenses should be included in the basket and whether or not the individual taxpayer will have full possibility to choose between those that have a percentage. Issues that risk making actual tax savings difficult to predict and lead to preferring the certainty of the immediate discount of a black payment”, continues the newspaper.
ENERGY, BUDGET CUTS TO MINISTRIES
“Challenging in general terms, proportional to the size of the individual budgets in its particular manifestations, the care of the cuts imposed by the budget law on the ministries remains to be measured in its operational consequences. Which will depend on how each administration manages to manage an account worth 7.7 billion euros in three years, of which 2.64 in 2025: a very complicated figure to reach with a simple thinning out of any “waste” still present in many branches of the PA or limiting itself to reducing spending on “general administration”, which in fact covers a very minor share of the cuts. Also because we are not at year zero, and the new round of scissors arrives to accelerate a process that was started in 2022 and has arrived to ask for 1.2 billion this year (and 1.5 next year). As in previous episodes, the same Ministry of Economy that conceived the cuts is also inevitably the most affected. At Via XX Settembre the three-year request reaches 2.2 billion; and with the over 1.1 billion requested from the Ministry of Business and Made in Italy, the two economic ministries par excellence are called upon to bear 43% of the overall cuts alone. (…) Because even the Infrastructure led by Matteo Salvini, who on the eve of the maneuver had announced meetings with Giorgetti to «defend the ministry’s budget», receives a request for almost 825 million; just above 700 million the trap foreseen for the Ministry of the University stops while the diet requested from the Interior Ministry is close to 610 million”, we read in Il Sole 24 Ore.
“At home, the Ministry of Economy decides to reduce above all the program entitled to assessment and collection of revenues, with a cut of 536 million in three years to be read together with the abundant 75 million requested from the Financial Police. But the duty is also significant for “incentives for businesses”, which lose 420 million in the same period of time, and for items such as “basic and applied research” (380 million)”, continues the newspaper.
“The cut is heavy for the Ministry of Business and Made in Italy, which will have to contribute to the spending of 1.13 billion in the three-year period: 366 million in 2025, 376 million in 2026 and 388 million in 2027. It is almost entirely the mission “Competitiveness and business development” (1.10 billion in the three-year period) and in particular, within it, the “Incentives for the production system” program (around 560 million). (…) However, these measures will not necessarily be defunded, because the ministry will be able to propose changes to the Treasury and rebalance the cuts by acting to a greater extent on items or incentives deemed ineffective or of low circulation, also trying to take advantage of the next legislative decree being implemented of the delegation of reorganization of incentives. Decree which – after the first, just examined by the Council of Ministers, which provides for the creation of a single Code for the procedural part – will be called upon to reduce the framework of benefits”, continues the newspaper.
