The words of International Monetary Fund On the Italian public debt he came with a clear and unambiguous tone: for highly indebted countries, such as Italy, it is crucial to be “a little more ambitious”. The reminder launched during the presentation of the Outlook for Europe was not heeded, so much so that the Minister of Economy Giancarlo GiorgettiAsked for clarification directly from the director, who was in Washington for the financial institution’s annual meetings. Kristalina Georgieva.
The IMF asked Italy for more ambition.
Last Wednesday, the fund presented a financial monitor, highlighting how Italian debt to GDP ratio reach, is destined to grow in the coming years. 142.3% by 2029. Helge Berger, representative of the IMF’s European Department, explained that although the ratio has fallen compared to the 2020 peak, it is still too high to allow for a gradual approach and, conversely, a more decisive one. And ambitious plan. He said the IMF “welcomes” the budget adjustments agreed by Rome and Brussels, but it is “very important to be more ambitious” for countries like Italy.
According to Berger, the need to reduce debt becomes urgent not only to guarantee greater sustainability, but also to position Italy to improve economic growth. Indeed, the Fund encourages policies that take growth into account, including structural reforms that can facilitate fiscal consolidation. Alfred ComerThe director of the European Department stressed the importance of continued commitment by the entire euro area, including Italy, to reach its full economic potential. “The continent’s recovery is gradually strengthening – Comer commented – but remains below real potential”.
Giorgetti Gets Irritated: A Flight of Explanation
The fund’s analysis struck a nerve with the Italian government. A call to max desire The debt reduction came as Giorgetti was on his way to Washington after making final changes to the fiscal policy. The minister welcomed Berger’s comments with indignation, as he believes the IMF has not adequately acknowledged them. Efforts have already been implemented to balance public finances.
During an informal dinner in Washington, Giorgetti expressed his frustration in a sardonic tone: “When I’m born again I want to be an economist for the Fund.” This outrage was addressed to Director Georgieva before a formal clarification was requested, with whom the Minister then had the opportunity to speak. According to Finance Ministry sources, during the meeting, Georgieva acknowledged the value of Rome’s efforts. Definition of Italian determination Advancing fiscal consolidation without compromising economic growth.
Rating agencies approach
According to the Ministry of Economy and Finance (MEF), Berger’s comments about the debt were not specifically aimed at Italy, but were meant to recall a wider European context. Miff believes the return was inflated by the Italian media for purposes of criticizing the government and its economic policies.
The following day, Giorgetti also met with representatives from Fitch, Moody’s and S&P, receiving more positive feedback on Italian prospects. For example, the DBRS agency affirmed the Italian rating and improved the outlook from stable to positive, indicating “an improvement in Italy’s fiscal momentum”. A signal Encouraging And that gave the government breathing space, countering the IMF’s critical observations.
European Prospects According to the IMF: Reforms and Investments Needed.
But there is also the European context to consider. Alfred Comer He stressed that a “strong reform effort” is needed to accelerate European growth and reach the potential of the US and Chinese economies, without which the continental economy risks being blocked. According to the fund, structural improvements should aim to accelerate productivity and growth by removing internal barriers. Model recommended by Mario Draghi. Comer noted that Europe’s “single market” could be a solution to support productivity and enable a lasting and inclusive recovery.
To achieve these goals, according to the IMF, it is also important to strengthen the Banking and Capital Markets Union, which are two essential tools to facilitate access to credit for new high-productivity companies. Comer then expressed a negative opinion of duties, which were seen as more harmful than helpful to the economy. A position that goes against the majority and calls for keeping the European market open and avoiding protectionist measures that would hinder economic recovery.
The Italian budget context: Gentiloni’s words
In response to the IMF’s assessment, the European Commissioner for Economics, Paolo Gentiloni, reiterated that Italy, like other European countries, has a framework of budgetary rules. Balanced That provides a reasonable pace of adjustment and debt reduction.
Gentiloni emphasized that, beyond general recommendations, Italian debt reduction It must keep pace with the needs for reforms and the investment needed to restart the economy. Gentiloni then points to the problem, explaining how only with this approach can we combine budgetary discipline and growth, while also guaranteeing the possibility of responding to global challenges. give