by Giuseppe Fonte
ROME (Reuters) – Italy recorded the highest public deficit in the European Union (EU) last year, at 7.4% of gross domestic product (GDP) compared to a previous estimate of 7.2% , show data on Monday from the statistical agency Eurostat.
This ratio is more than twice higher than the average of the 27 EU countries, which stands at 3.5%, and underlines the difficulties of the Italian Treasury in controlling the country’s public finances.
In total, 11 countries reported deficits above the 3% of GDP ceiling set by the EU, including France, at 5.5%.
The European Commission should launch an excessive deficit procedure for all these states, Italian Economy Minister Giancarlo Giorgetti said this month.
The only other countries with public deficits above 5% in 2023 are Hungary (6.7%), Romania (6.6%) and Poland (5.1%), all located outside the zone. euro.
This upward revision of the Italian deficit highlights the government’s miscalculations regarding the impact of renovation bonuses, costly tax incentives aimed at encouraging the renovation and modernization of real estate.
Introduced in 2020, aid for energy renovation has already cost 160 billion euros according to the government, well above estimates, and must remain in place until the end of next year.
The Italian Central Bank told Parliament on Monday during a hearing on the Treasury’s multiannual budgetary framework that this “superbonus” had cost nearly 4% of GDP in 2023 alone, more than five times what Rome anticipated. ‘last year.
The Bank of Italy called in the future to “avoid repeating the errors that characterized these recent measures.”
Italian public debt, the second largest in the euro zone as a proportion of GDP, is closely monitored by rating agencies and the markets, and is expected to increase further to reach 140% of GDP in 2026, according to the latest Treasury forecasts. .
(Report by Giuseppe Fonte, French version by Kate Entringer, edited by Blandine Hénault)
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