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It is a well-known and recognized fact that high debt makes financing more expensive for companies, which reduces their competitiveness and incentives to invest. It is also known that it exposes the national economy to the effects of destabilizing fluctuations in financial markets and takes away resources for countercyclical policies, social interventions and pro-development measures. Even the methods for dealing with this exceptional situation that Fabio Panetta immediately listed yesterday are not new, although the Governor of the Bank of Italy has arranged them with extreme precision, as only a long-time central banker would know how to do.
However, the analysis presented by Panetta on the impact of the PNRR on our economy is completely new, if the reforms that form its basis are implemented on time and with the quality promised. According to the assessment of the Bank of Italy’s office, the implementation of the PNRR from 2021 to 2026 is expected to have an impact of 9 percentage points on GDP, in addition to an impact of 4 percentage points on permanent income. These are important quantities that, if not overturned, at least significantly improve the fundamentals used by rating agencies as an excuse to express their judgment on the quality of a country’s debt, reducing the costs for debtors and thus making it more sustainable. The agencies that rate our economy would have reflected on this situation if they were not hampered by an old prejudice against the robustness of the Italian system.
These are not just our considerations. In June, Paolo Savona, president of Consob, had not yet sent a message to rating experts. While acknowledging that the Italian economy is still exposed to geopolitical risks, Savona strongly invited the three major international agencies to upgrade the Italian debt rating, precisely because of the good fundamentals of the national economy. In addition, he mentioned the benefits that can be brought about by the correct and timely implementation of the PNRR.
Of course, we do not hide the fact that, while Italy has succeeded on paper in proposing the reforms that concern it, the implementation of projects has had difficulty finding an acceptable pace, not only due to the laziness of the designated institutions, but also due to the uncommendable obstructionist behavior of certain local administrations, who are more committed to the tricolore of their parties than to the tricolore of the parties themselves.
The flag is flying over Torino del Quirinale. Well, thanks to Panetta’s timely exposition of the highly positive impact of strictly reducing Pnrr, we now know what we are playing for.
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