Brussels, 18/02/2014 (Agence Europe) - On Monday 17 February, Italy's Economy Minister Fabrizio Saccomanni submitted preliminary information about Italy's structural savings plans to Euro Commissioner Olli Rehn on fringes of the Eurogroup meeting.
Preliminary data from the Italian spending review suggest structural savings to the tune of 2% of GDP by 2016, said Saccomanni in a press release published on Monday 17 February.
The figures have not yet been formalised in Italy and will not be included in the economic forecasts for Italy to be unveiled by the European Commission in Strasbourg on Tuesday 25 February.
Investment clause will not be activated. The recently defeated Italian government remains determined that Italy should continue with the public deficit reduction trajectory to bring it back to below 3% of GDP. If this policy continues under the new Renzi government, it is unlikely that Rome will activate the investment clause in 2014 (which allows countries with deficits of below 3% of GDP to not include certain investment co-financing spending on infrastructure backed by the EU in its debt calculations). The Italian government feels the clause has lost its appeal because it would cost as much to implement as the government could hope to generate (see EUROPE 11020). Italy says that investments already included in the budget will be implemented even if the investment clause is not activated.
One scenario being discussed in Brussels is that of Italy deciding to raise its public deficit to above 3%, thus exposing itself to another round of excess deficit proceedings, but this time as part of a reform contract signed with Brussels. (MB/transl.fl)