On May 15, the European Commission presented its spring forecasts, according to which euro area GDP, after last year's slowdown (0.4%), would rise to 0.8% in 2024 and 1. 4% in 2025. It is a growth rate that remains quite low, especially when compared with that of the United States (not to mention China), which in 2023-2024 grows on average by 2.6% per year and then slows down, according to IMF, at 1.9% next year. But by now we are used to these modest increases in European GDP. Even Italy, after the exploit of 2021-2022, in which it grew by more than 6% on average per year, falls to 0.9% in both 2023 and 2024 before moving to 1.1% in 2025.

The Italian government consoles itself with the thought that also in 2024, for the fourth consecutive year, the Italian GDP, on the long wave of tax bonuses for construction, would increase more than the Eurozone average and more than France and Germany.

But already in 2025 Italy would return to growing less than the European average and France itself (+1.3%), approaching the 1% expected for Germany which is slowly emerging from the recession that hit it in 2023 (-0 ,3%). It is clear that the greater public investments due to the National Recovery and Resilience Plan are not sufficient to compensate for the loss of the boost coming from the building bonuses.

In this macroeconomic framework, the performance of public finances raises concerns. The Commission's forecasts point to an increase in net debt and public debt to GDP, respectively, from 4.4% and 138.6% in 2024 to 4.7% and 141.7% in 2025. It is implicitly the confirmation that Italy will most likely find itself facing an excessive deficit procedure after the European elections. A fate that will probably also befall France. But the real problem is not so much that of incurring a procedure by the Commission but rather that, in a situation of structural correction of public finances, the resources will have to be found for the new budget law that will be prepared in the autumn.

Here the discussion shifts to the 2024 Economic and Financial Document approved by the Italian government in April without the programmatic part, with only the trend framework of public finance. The Minister of Economy Giorgetti justified himself in the press conference, saying that in September the government will have to present the fiscal plan envisaged by the new Stability Pact, the precise application methods of which are not yet known.

The truth, however, is that the government wanted to keep its hands free so as not to disappoint voters ahead of June 8-9. Moreover, in a somewhat hidden table contained in Section II of the Economic and Financial Document, the greater net debt required in 2025 by the performance of public finances "with unchanged policies" is indicated at almost one point of GDP. It is the equivalent of approximately 19-20 billion euros, a figure very close to the 18.2 billion euros which, according to the Parliamentary Budget Office, will have to be found to deal with the measures foreseen by the 2024 Budget Law which expire in end of the year and which the government has always assured that it wants to renew.

This figure includes the cut in the contribution wedge paid by employees (10.8 billion euros), the tax credit for investments in the special economic zone of the South and the refinancing of the Nuova Sabatini law (1.9 billion), the refinancing of international missions (1 billion), the tax relief of corporate welfare and productivity bonuses (0.8 billion), the support for the poor (0.65 billion), the first module of the tax reform (0.6 billion), the reduction of the television license fee (0.4 billion), the social security measures for female workers with two dependent children (0.3 billion) and other measures. Furthermore, the government had promised to extend the tax reform, worth almost 5 billion euros.

After the European elections, the update note of the Economic and Financial Document in September will have to, on the one hand, indicate a credible path to bring the deficit below 3% of GDP by 2026, as promised by the government, and, on the other, present measures for growth and reforms. Where to get the necessary money? Excluding tax increases for now, the Minister of Economy hypothesizes interventions on public spending by ministries and on tax expenditures. For both items, substantial cuts are promised every year, which are then promptly disregarded under pressure from the competent ministers and various lobbies. It is therefore likely that many of the measures promised by the government and already contained in last year's Budget Law will not be refinanced.