Padoan: “Flexibility in the Stability Pact is the starting point, we need to be farsighted in applying rules”

The flexibility contained into the Stability Pact is “the starting point” and rules “shall be used in the best way and being farsighted.” Pier Carlo Padoan reiterated the need of working within the current legislative frame during the presentation of the programme of the Italian Presidency Semester at the Committee on Economic Affairs of the European Parliament. According to the Italian Economy Minster in fact, “if we believe in structural reforms we need to be aware that it takes time for them to bear their fruit,” it could take “1, 2 or 3 years to understand whether the reform has been well-conceived and implemented in the right way.” The trouble is that a reform “needs not only to be approved by Parliaments,” it also needs “to be implemented correctly,” and here is the sign of its efficacy. Not in the announcements “on the first page of newspapers,” said Padoan.

Dealing with growth, we need “investments able to stimulate demand on the short-term, and to increase the productive capacity in the long-term.” With strict rules on public investments, there’s no choice but loosening the ties of private ones. “It is crucial for SMEs to access non-banking credit, there’s much to do to ease non-banking loans for some SMEs,” said Padoan. In the meantime, it is necessary to have available public resources free from constraints. “The internal Stability Pact seems to be inefficient,” acknowledged Minister Padoan: “the full use of structural funds is limited” and this is the crucial problem according to Padoan, who announced that “the Government is studying a way to review this internal fiscal frame in order to keep financial discipline at local level and to use full resources – even structural funds – in a better way as well.”

Another issue on which Italy is working is the taxation of financial transactions. “The Italian Presidency will work to improve the increased strong cooperation on the taxation of financial transactions,” said Padoan. No easy issue, it is very important to agree on a schedule for allowing a gradual introduction of the tax.” The initiative has so far been limited to 11 Member States, but when an agreement will be made, said Padoan, “this will push other States to enter the agreement.”