Today, 13 November 2023, the hearing of the CNEL’s President, Renato Brunetta, took place at the Joint Committees on the Budget of the Chamber of Deputies and the Senate concerning the preliminary fact-finding activity prior to the examination of the bill on the State budget for the financial year 2024 and the multi-year budget for the three-year period 2024-2026.

Here are the main points of the hearing

“DESPITE THE CLIMATE OF UNCERTAINTY, IT’S AN OPPORTUNITY FOR A MORE INTEGRATED AND SUSTAINABLE EUROPE”

"The climate of uncertainty over the announced reform of the Stability and Growth Pact prevents, due to objective reasons, that the budget law can fulfil its role as a potential instrument for promoting a more integrated and sustainable European economic policy. This also has an impact from the point of view of coordination with the Committee's budget on the desired common investment policy, as well as on the commitment to promote a common economic policy in Europe based on a European-level fiscal capacity, which can be an appropriate complement to the monetary policy of the European Central Bank. “This does not prevent, however”, continued the CNEL’s President, “that the budget law represents an important opportunity to signal our country's willingness to commit itself to building a more integrated and sustainable Europe. The goal remains that of fostering economic growth and the well-being of the populations of all countries, strengthening the economic stability of the Union, making it less vulnerable to crises and promoting more sustainable economic growth, based on investment in innovation and infrastructure, under the common and priority aim of a progressive and permanent increase in the quality and quantity of employment”.

“RIGHT CHOICES, BUT COMMITMENT ON GROWTH, EDUCATION AND HEALTH POLICIES IS NEEDED”

“In such a composite and uncertain context, the Budget Law is characterised by fiscal prudence and measures of limited quantitative impact on both the expenditure and revenue side, thus fulfilling a twofold objective. On the one hand, providing guidance as to what the future direction of fiscal policy and the reforms under discussion will be, but substantially postponing their implementation burdens, on the other hand, providing objective elements of reassurance both of the financial markets, which support the Italian public debt and at the same time direct international capital flows, and of the real markets, where households and businesses make consumption and investment decisions in a climate of expectations whose orientation is turning negative. In the CNEL's view, these basic choices appear to be essentially right, even if they require confirmation in the consistent pursuit of budgetary policy. “The overall judgement”, added the CNEL’s President, “is inevitably influenced by the government's ability to demonstrate a consistent commitment to find room for growth policies. This requires, first of all, a spending review that implies a profound restructuring in both expenditure and revenue, investing in the reconstruction and upgrading of both public physical and human capital, and implementing public support for investments in education and public health, which are key elements in strengthening the economy”.

“STRENGTHENING TIES WITH THE NRRP (NATIONAL RECOVERY AND RESILIENCE PLAN)”

"It is essential that the government maintains a continuous and consistent “streamlining” of the public budget, eliminating expenditures that are not aligned with the general interest, and that a strategic and synergic integration with the NRRP is ensured, re-establishing and consolidating its necessary link, as a vital source of investment and promoter of policies to reform markets and institutions. In this sense, the CNEL reiterates that the structural reforms included in the NRRP are now even more crucial for modernising the Italian economy and making it more competitive globally. A stronger link between the Budget Law and the NRRP - as advocated by the CNEL - would demonstrate a consistent, long-term vision for the country's economic development. Such an approach would also send a positive message to financial markets and international partners about the country's commitment to stability, innovation and reforms”.

For the CNEL’s President, “finally, it is crucial to recognise that the success of the strategy outlined in the Italian Budget Law is closely linked to Italy's ability to take a proactive role in European negotiations. This is crucial to promote a more integrated Europe and strengthen its ability to implement a common economic policy. In this context, the credibility and soundness of a Budget Law geared to financial stability and sustainability become key elements to strengthen Italy's negotiating position in Europe”.

“SOCIAL PARTNERS’ INVOLVEMENT ON GROWTH POLICIES IS ESSENTIAL"

“Equally important is that government action be able to acquire, consolidate and internalise the consensus of the social partners in the formulation of a growth policy, to ensure the effectiveness and sustainability of that policy. An inclusive approach that actively involves trade unions, business associations, and other social actors is, in the CNEL's view, crucial to ensure that growth and structural reform strategies are aligned with the needs and expectations of different sectors of society. By showing an ability to build consensus and manage reforms in an inclusive manner, Italy could present itself in European scenarios as an effective and responsible model of economic and social governance, thereby consolidating its international position. “The consistent, mutual and conscious construction of the social partners' consensus on growth policies”, added the CNEL’s President, “is not only an ethical and democratic imperative, but also a practical strategy to ensure that reforms are effective, balanced and sustainable in the long term. In this sense, all the social partners present in the CNEL, in addition to highlighting the need to take due account of the new National Sustainable Development Strategy (NSDS), agreed on the opportunity to reactivate the economic, social and territorial partnership round table, with an advisory function on the areas of intervention of the Plan, and on the profiles considered relevant for overcoming obstructive or slowing circumstances, for the main purpose of further enhancing the contribution and the decisive role played by the latter together with the territory and civil society”, he concluded.