The Government accelerates its journey towards the 2027 budget: on the evening of Friday 2 October the Council of Ministers approved the public finance planning document, the first concrete step towards the new Budget Law.
The Dpfp is the framework, the macroeconomic framework in which the main contents of the Budget being written will be indicated, together with its financial effects.
Flexibility
The Government is aiming for a flexibility request of around 14 billion for 2027 and 14 billion for 2028, which translates into 0.3% of GDP for defense and 0.3% for energy each year.
On the one hand, the Meloni Executive says it is intent on following the path already followed to date, that of aid to families and businesses. But on the other hand there is the need to keep public finances under control. The prime minister is pressing the EU to ask for greater flexibility.
Maneuver 2027, the measures under study
At the moment, there are four directions that could find space in the 2027 Budget.
First of all there is a new intervention on the Irpef: the idea is to extend the cut of the second rate, the one currently at 33%, to incomes between 40 and 50 thousand euros, which today are taxed at 43%.
For young people, a flat tax of 5% on salary increases is then assessed, also called “start tax”.
The dry tax could arrive for shops, albeit with some limitations.
And then there is the home chapter: the starting hypothesis is the confirmation of the 50% renovation bonus for first homes, but we are also working on the possibility of bringing the Ecobonus benefit up to 65%, especially for interventions related to energy efficiency.
Let’s reiterate: at the moment these are only hypotheses included in the comparison on the Maneuver, it will take months to have definitive measures (possibly remodulated).
The crux of public accounts
The problem is that the available margin is narrow: the Government must in fact take into account the trend of interest rates and the spread, as well as inflation.
This is the comment of the Minister of Economy, Giancarlo Giorgetti:
We approved the Dpfp which comes in a particularly complex context in many respects so making predictions becomes increasingly complicated.
And again:
Compared to the intentions of a few weeks ago, we have decided to reduce the defense effort. The deficit should also remain below 3% in 2026, but as you know it is not enough and our forecasts, taking into account the additional spending allowed by European rules, are that it will rise to 3.4% in 2027, 3.3% in 2028 and 2.4% in 2029. As regards the debt path, the trend profile is 138.1% in 2026, 138.6% in ’27, 137.7% in ’28 and 136.3% in 2029.
The deficit
The minister then specified that
The 2027 and 2028 deficit data are above 3% but must be purified by the deviation relating to defense and energy and consequently if you purify the 0.6% you will find a figure lower than 3%. Decimals make the difference and therefore the hope is to open that space.
Inflation and interest rates
This is what Giorgetti then expressed:
I will not hide from you the attention with which we constantly monitor the situation of inflation and interest rates. The Italian proposal to consider the impact of inflation on the spending path was not created to ask for different or further flexibility. It is done simply to draw attention to the fact that the spending path – and therefore the targets that were given to individual national countries and individual governments exactly 3 years ago with a profoundly different expected inflation rate – cannot fail to consider the different impact that inflation has had on the nominal expenditure path which is the objective that is given to us and therefore I believe that anyone who is even an expert in the matter can understand the type of complaint, which is not only from the Italian government but also from other European governments, which we have posed in terms of pay attention to Europe.
