The Commission has adopted today its Opinion on Italy’s updated Draft Budgetary Plan (DBP) for 2023. The Draft Budgetary Plan presented by the Italian authorities updated the no-policy-change plan submitted by the outgoing government in October 2022.
This Opinion finds that, overall, Italy’s updated DBP is in line with the Council Recommendations of July 2022: Italy limits the growth of nationally financed primary current expenditure and it plans to finance public investment for the green and digital transitions, and for energy security. While Italy rapidly deployed measures in response to the increase in energy prices, it is important – as recommended to all Member States – that Italy increasingly focuses such measures on the most vulnerable households and exposed firms, to preserve incentives to reduce energy demand, and withdraws these measures as energy price pressures diminish.
The Commission is also of the opinion that Italy has not yet made progress with regard to the structural part of the fiscal recommendations contained in the Council Recommendations of July 2022, which required Italy to adopt and appropriately implement the enabling law on the tax reform to further reduce taxes on labour and increase the efficiency of the tax system. Moreover, Italy’s updated DBP includes measures that are not consistent with the structural part of previous fiscal recommendations, namely in the area of pensions and tax evasion, including on the compulsory use of e-payments and the legal thresholds for cash payments.
Under the European Semester, the EU’s economic policy coordination cycle, the Commission issues each year Opinions on the Draft Budgetary Plans of euro area Member States. As has already been done for all other euro area Member States, it will now be for the Eurogroup to discuss the Commission’s Opinion on the Draft Budgetary Plan. The national parliament should then take this discussion into account before adopting the budget for 2023.