English version thanks to Marion Sarah Tuggey
se vuoi leggere l’articolo originale in italiano clicca qui
Assorted statements on the spending review. Just to get the point on where we are, in terms of political communication and perhaps to answer, at least partially, to everyone asking “What do you mean when you say we’ve lived beyond our means”:
the leader of the PD (Democratic Party), Bersani:
“We need to restart these days a profitable discussion between the Treasury and the Public Welfare Ministers, and the Regions. In the Parliament we’re going to do our bit – but we don’t have a majority. If there’s a table State-Regions, we’re going to be present interlocutors but without such a solution I think the situation could get very difficult. Without an institutional discussion, there’d be more noise than real saving. In the actions included in the spending review on the Welfare area we can count rational interventions, but these targets recall the logic of “access shares” to the Welfare funding, therefore it is a linear logic: this system would then give even more pressure on virtuous Regions, and this is one of the aspects we have to modify.”
Cicchitto, PdL (the People of Freedom Party)
“the PD, together with the Cgil (General Confederation of Italian Workers), has expressed its will of changing the spending review measure during the Parliament path. Now, the matter gets very serious because we want to affirm the existence of two statuses: the PD one, which has a licence to kill – that is, to modify in the Parliament the measures without being stopped by a motion of confidence, and the PdL one which on the other hand is not allowed to modify any measure, being blocked by that motion. It’s then clear that there’s a status asymmetry which is unacceptable, and we want to reaffirm it in particular dealing with the cuts on the public expense which we broadly agree with, apart from some specific detail.”
Vinicio Guasticchi UPI (Union of the Italian Provinces):
“We agree on the need of cost reduction and services rationalization, but this path must be taken only with specific proposals which have been arranged in concert with UPI, ANCI (National Association of Italian Municipalities) and Local Autonomous Institutions. In addition to this, they have to take into account the territorial realities, where it has to be possible to intervene without creating difficulties or discomfort to structures or services to the citizens. It is wrong to go ahead with wholesale cuts based on strict parameters, containing mere figures, which are then placed on the territory – and there is where the axe falls. The spending review can not eliminate, indiscriminately, useless institutions as well as vital institutions which have performed well their historical, social and economic main role for the regions they are in. We’ve always said we are in favour of streamlining local institutions in order to rationalize public expense – which will give money into the nation’s cash in turn, but it has to be one respecting the quality of the services offered to the citizens, and this is the reason why we are worried about some of the cuts which are going to affect the service quality without obtaining real saving, creating problems and waste. UPI has always been ready to discuss the role of the Provinces into a general streamlining of the institutions which has to be targeted towards the real wastage – such as 3,127 instrumental institutions which represent the secret chambers of politics, costing over € 7bn to the country. As you might already know, we’ve presented a proposal of self-reform which could guarantee the state with € 5bn in savings, targeted towards a better management of the resources in order to favour development, and not composed of mere indiscriminate cuts.”
Vasco Errani, PD (Democratic Party):
“In the last three years, the Public Welfare area has suffered cuts for €21bn, including the latest spending review, and the ‘logic of emergency’ pursued so far can’t allow the system to last – maybe this year, for sure the next one. The spending review is wrong because it follows the path given by the Treasury lately in order to intervene in the Public Welfare area: cut the expenses, and then reorganize. Unfortunately, streamlining is a step we have never seen so far. We need a road map, or the Welfare sector is going to move backwards here in Italy. We need to change our approach, or I don’t know what is going to be saved of our Welfare sector from now on in the next five years.”
The Minister of Public Welfare, Renato Balduzzi:
“The Minister will be available for discussing the measures on Public Welfare from tomorrow on. These measures are not simple cuts – they are attempts to re-qualify public expenditure in a difficult economic moment, without damaging our citizens’ rights. I fiercely oppose the interpretations saying that the spending review intervention on Public Welfare could be seen as a linear cut on resources – the total amount of the interventions on the Public Welfare area is €7.9bn within 2014 indeed, and there are going to be awarding mechanisms for the most virtuous Regions in the management of the expenditure system.”
The President of Verdi (The Greens) Angelo Bonelli:
“If the Minister is talking about correct figures (- €7.9bn in three years), then Public Welfare is going to shipwreck, abandoning millions of citizens to their faith. With this last reform, Monti and his Government are demolishing the Italian Welfare system, with the mere target of favouring the private insurance companies – which are waiting to find their El Dorado here in Italy too.”
Nichi Vendola, leader of SEL (Left, Ecology and Freedom):
“The so-called spending review decree is a fake, being inspired by Tremonti (former Treasury Minister), slashing and hitting rights and services for the citizens. I wish the PD will be able to show its strength in order to avoid even the minimal attack to the right of well-being – after that, in the centre-left program we are going to write all together, I wish we can clearly state we are breaking up with any liberalistic policy and their populist derivations.”
At last, the Moody’s Weekly Credit Outlook: the plan for cutting public expense which is going to be implemented by the Italian Government through the spending review will have negative results for the credit profile of both regions and local institutions: regions will withhold 60% of the proposed cuts, and a 25% will be withheld by municipalities and provinces. The need for a further reduction of the expenses would get in trouble accounts which are already at their minimal pace. Regions, says Moody’s, will concentrate most of the allowed expenditure on Public Health, reducing the areas of transports, welfare and corporate funding. Municipalities and provinces may find themselves in trouble in funding the decrease of transfers from the central authority, with initiatives aiming to increase the earnings – among them, increase of local taxes and service fares, cuts to expenses. And the improvement of a great range of assets, through the sale of real estate properties or shares in service companies could prove to be difficult in a low-growth scenario, giving less earnings than expected.
A note on the Spending Review Decree by the Service of Accounts of the Upper Chamber:
“In addition to the potential financial effects, we are signalling that, further to possible savings given by the cancellation and rationalization of the Provinces and their functions, there could be the birth of extraordinary expenses given by the transfer of functions from the Provinces to the concerned Municipalities, in addition to the loss of economies of scale. This alert is given even if the device essentially is a policy document, investing further decrees with the implementation and the following financial effects. It is necessary to clarify whether the cuts which intervened later on the organic staff and supply, together with a stop of the turn over, could create in the following years troubles in satisfying the minimal performance needs of those administrations. It is necessary to rule out any doubt on the risk of an increase in the expenditure which could be registered for outsourcing to temporary or project-bound workers etc. – aspect which may cancel, at least partially, the expected savings in the medium term from the reduction examined. The same considerations may be applied to the risk of a counter-effect of these reduction on a potential increase of management positions fulfilled with fixed-term contracts”.
The Economy Minister Grilli:
“This government has clearly demonstrated it’d avoid a VAT increase – which has been postponed to the second half of 2013 thanks to the Spending Review Decree – it wouldn’t be useful for our economy to further increase taxes. In order to do so, it’d be necessary to raise other €6bn from the second half of 2013”.
A little, colourful note:
“This is a figurative debt, which is not a burden for our issuances” said Vittorio Grilli answering a question about the effect on the national debt of the funding for Spain through the EFSF. “More or less we’re talking about those figures.”
…Dear Minister, we beg your pardon, are you trying to tell us we are increasing our VAT in order to raise money to fund Spain?
Come on, the EFSF funding is given in a single tranche, while we’d need €6bn not to increase VAT each year, as structural expense. Please, dear Minister, do not feed the trolls…