Padoan is optimistic: “The Commission confirmed Italy is on the right path”

Even though there are critical points to be solved, there have been several improvements, and that’s where the Italian government is looking at. The Italian Minister of Economy, Pier Carlo Padoan, remains optimistic after the EU Economic Forecast released on May 5: the analysis underlined that Italy will suffer for a modest growth in 2014 and will get back to recovery only in 2015. These estimates, said the Minister, “clearly confirmed the economic growth of the country is improving, competitiveness is improving, investments are growing as well as employment.” In short, Padoan said, “things are going well.

In addition, “the Commission did not take into account the policies implemented” by the Renzi government. This is the reason why Brussels released a figure for the structural balance “different from our forecast.” Padoan reassured he is not “worried” at all, given that “even other countries, which I am not listing here, have a structural adjustment position worse of our one, or al least “less better” I dare to say.”

Hence, the idea in Rome is that the EU Commission criticism against our country could be at least be seen as “ungenerous”: “How could they critic a country which is increasing its primary surplus and decreasing its deficit?”

Padoan said he is ok even with the judgement expressed by Brussels on the tax relief plan designed by the government – which according to the Commission will have a neutral short term effect. Everyone “in Brussels as well as in Rome,” said Padoan, knows that the effects derived by the measures taken “cannot be immediate” and that “they require some time” but the message sent by the EU Commission to Italy is that the country “is on the right path, hence we took the fight measures.”

For sure, the crucial aspect of public debt is still there – the true problem of our country: the Commission forecast a further hike in 2014, with estimates higher than those of the Italian government. Yet, according to Padoan, “decimals” matter little: “We have said that debt would have increased for a long time, and that it will begin decreasing starting from 2015,” he said. Especially, “given the primary surplus which is going to increase, given the cost of debt which is decreasing” and given the “positive contribution of privatizations,” everything “arithmetically” indicates that “debt will decrease, even more fast than we think.”

Even the first opinion on the Economic and Financial Document, approved by the government and sent to the EU Commission lately, which is going to be sent to Italy on June 2, together with the Commission Recommendation to the country. “I expect an objective evaluation,” said Padoan. The EU Commission, as anticipated by Rome, “will recommend us measures we already know we need to implement, that is, Italy needs to grow and debt need to shrink,” thing “we are already working on.”

“The Commission,” commented Padoan, “will make its evaluations, but it hasn’t had the time to deeply analyse the measures we took for 2014, and we are taking for 2015 and 2016. I’m convinced the measures we are deciding will add a positive impact to the ones we have already approved, because they will be consolidated over time, they will be permanent, hence the ‘trust effect’ will be significant.”