Italian Finance Minister Giovanni Tria said on Monday 19 November that discussions at European level should focus more on how to respond to a slowdown in economic growth in Europe, criticising the prevailing view that any expansive fiscal policy would be prohibited outside a recessionary situation.
“There are no anti-Italian prejudices except prejudices towards certain policies" that allow "expansive fiscal policies only when we are in recession", said Mr Tria at the end of the Eurogroup, convinced that this is an "erroneous position".
The European Commission will present its views on Wednesday on the 2019 draft budgets of the euro area countries, including the Italian Finance Law, which may violate the Stability and Growth Pact (see EUROPE 12137).
The Minister would like the debate not to focus on the gap, which he estimated at "plus or minus 0.4%", between the public deficit claimed by Rome (2.4% of GDP) and the one that would ultimately be tolerated.
On the contrary, he would like discussions at the European level to focus on measures to address the observed slowdown in growth. If Germany stops, it will have a significant impact on the euro zone and Italy, he said.
Hence the need, according to him, to take a "different look” at the Italian draft budget, which is not obsessed with the deficit figure. The Italian government intends to provoke a growth shock through increased purchasing power, with the creation of a citizenship income, and public investment in infrastructure.
Mr Tria argued that the Italian deficit is currently "one of the lowest" in Italian history, with a primary budget surplus (excluding debt service) in 20 years. Public debt is certainly a problem, but it is mainly inherited from the previous century and increased less after the 2008 financial crisis than the debt of other eurozone countries such as France, he said. (Original version in French by Mathieu Bion)