Brussels, 19/05/2015 (Agence Europe) - The European Commission finds that the future Italian decree on the reimbursement of some of the pensions which were frozen in 2011 and 2012 will not harm the public finances in such a way as to derail Italy from the recommended budgetary consolidation trajectory.
“On the basis of the announcements of the (Italian) government, the Commission's analysis of Italy's stability programme, based on the spring economic forecasts, remains unchanged”, the European institution stated in a note leaked to the Italian media (our translation). It adds that a “definitive assessment of the impact of the decree on public finances will be carried out once the official text is available”. On Tuesday 19 May, a Commission spokesperson expressed approval of the fact that the Italian government is sticking to the public deficit targets laid down in the national stability programme.
The day before, the Italian government presented a draft decree aiming to pay back some of the pensions of above €1,400 which were frozen by the 'Monti' government in 2011 and 2012. The amounts reimbursed will be reduced on the basis of the pension amounts. “3.7 million people will receive 500 euros on 1 August. If you draw a gross pension of 1,700 euros, the bonus will be 750 euros, whilst it will be 278 euros for a pension of 2,700 euros. However, 650,000 people on a gross pension of more than 3,200 euros a month will get nothing”, said the head of government, Matteo Renzi, reported by AFP. The total reimbursement will be 2.18 billion euros, some of which will come out of a budgetary 'jackpot'.
According to the Italian finance minister, Pier Carlo Padoàn, “paying off all the arrears in 2015 would have called for resources which would have brought our deficit/GDP ratio to 3.6%”.
In its spring economic forecasts, the Commission predicts a return to growth in Italy, with an increase of GDP of 0.6% in 2015 (see EUROPE 11308). The deficit will stand at 2.6% of GDP, with Rome continuing to face the challenge of its high public debt, which will stand at 133.1% of GDP. (Mathieu Bion)