This year, Italian public spending “breaks through” one thousand billion euros. To keep the offices open, to pay salaries to public employees, pensions and to provide public services (health, safety, school, transport, etc.), the state spends almost 3 billion euros a day on Italians. . This was reported by the Cgia Studies Office.
A gigantic figure which, as was to be expected, has also increased following the important measures put in place for 2021 by the Conte bis and Draghi governments, notes the association with a note. Measures that have become indispensable to face the negative effects imposed by the pandemic crisis. Compared to 2020, in fact, this year the total expenditure of the state has increased by over 56 billion euros (154.2 million per day more than in 2020).
Mind you, says the CGIA, an important public expenditure, to mitigate the effects of an economic and social crisis never experienced in the last 75 years, is not a problem, on the contrary. In times of difficulty, no one can be left behind and the State has the obligation to implement all the necessary measures to protect especially the weakest social groups.
The 1 trillion of public spending that will come out of the public coffers in 2021 is an amount over 4 times higher than what we will be called to spend in the next 5 years with the money made available by the Pnrr which, we recall, amount to about 235 billion euros. . Nobody questions the importance and usefulness of the extraordinary resources that we will be called upon to invest in the coming years. God forbid. However, observes the association, we would like the debate that has opened in recent months on the need to spend these European resources quickly and well to be still alive.
An expense, the public one, which for almost 900 billion is current and is used, in particular, to pay the salaries of public sector employees, to allow the consumption of the public car and to pay social benefits. The assault on diligence that we have witnessed in these days in Parliament with the presentation of thousands and thousands of amendments to the budget law does not bode well. The danger that public spending in 2022 will well exceed the one trillion mark reached this year is very plausible.
Less taxes only with structural spending cuts In the next few years the problem will be to gradually reduce expenditure to allow the Government to find the necessary resources to achieve, in particular, a structural and significant reduction in the tax burden on households and businesses. With a debt / GDP ratio of around 154 percent, this reform cannot be financed in deficit.
Also because the EU, most likely, would not allow it; in light of the fact that the provisions of the Stability Pact, which in any case will have to be revised, should return to operation from 2023. Obviously, the CGIA report, thanks also to the resources put in place by the NRP, in the coming years it will be necessary to produce more wealth and work . Only in this way will we be able to significantly increase the number of employees which will allow us to spend less on subsidies, bonuses, grants and income supplements. Not only. We could also benefit from higher tax revenues, thanks to the payment of the new Irpef and additional social security contributions.
Expansive policies push up inflation The strong increase in inflation recorded in recent months is certainly attributable to the increase in the prices of raw materials (gas and oil in the first place) but also to the expansionary policies adopted by the individual states nationals and the ECB. However, the CGIA still says, although in the two-year period 2017-2018 the European Central Bank had managed to buy up to 80 billion euros per month of government bonds, now it buys about 15 a month. At the end of last October, with the Public Sector bond purchase program (PSP), the ECB accumulated 2,603 billion, of which 433 billion of Italian bonds (16.7 per cent of the total). In other words, a grandiose injection of liquidity into the European economic system has been made that is unprecedented.
In light of this, it is clear that if central banks want to “cool” expensive prices, they will most likely have to reduce the injection of liquidity injected in recent years. For a country like Italy which has a gigantic public debt, this scenario risks further worsening our financial situation.
Among the outgoings, pensions stand out: deficit at 167.7 billion According to the Update Note of the 2021 Economic and Finance Document, the most significant current expenditure item that we record this year in our country is that of pensions which amounts to 287.6 billion euros. This is followed by income from employment2 with 179.4 billion, intermediate consumption with 161.9 billion, other social benefits with 116.3 billion and other current expenses with 87.6 billion.
Including interest on public debt (equal to 60.5 billion), the total current expenses amounted to 893.4 billion, of which 129.4 for healthcare expenditure. If we also add capital expenditure (i.e. investments), which for the current year amounted to 107.3 billion, the final expenditure amounts to 1,000.7 billion. On the other hand, the study concludes, total revenues this year will reach 832.9 billion: therefore net debt stands at -167.6 billion euros (-9.4 per cent of GDP).
Source: RSS DiariodelWeb.it Economia by www.diariodelweb.it.
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