In Italy, the citizen income project continues to shrink

The 5-star populist movement, a member of the Italian coalition alongside the far-right League, promised a basic allowance to five million destitute people.

The successive amendments to the draft budget 2019 make this promise a real shake-out.

Certainly, we are far from the great awakening of the Democratic Party which will choose its new leader in primary elections, next March. But the return to its old traditions of proximity to the citizens made him gain some points in the polls, at 17% of voting intentions today, against 12% in December. An encouraging sign for the elected and left-wing activists who began on January 12, in the squares of suburbs and provincial cities, a mobilization called "A thousand no to the budget of taxes and lies".

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Because, indeed, the first budget of the government, formed of the League of extreme right and the populist Movement 5 stars (M5S), was definitively adopted on December 30th, after a downward revision of the so-called expenses of economic revival. A revision decided under the pressure of Brussels who is worried about the Italian debt, the highest in the euro zone after that of Greece (read the benchmarks).

But above all, the Finance Act was passed without the parliamentarians being able to see the new provisions ... the measures are made public over the course of the days and the opposition begins to point to an increase in the tax burden, the reduction of funds for research and culture and, above all, a resizing of the citizen's income, a key measure of the 5-star movement.

More than 10 billion euros out of the 16 billion expected

It must be said that the context has changed. The initial draft budget for 2019 projected a deficit of 2.4% of GDP and a 1.5% increase in activity. The latest version of the text reduces the growth forecast to 1%, and the public deficit to 2.04%. Specifically, out of the 16 billion euros provided for the citizen income and for the relaxation of the retirement system, strongly wanted by the League, there remains only 10 billion in total.

The implementing legislation for the measures, which will be the subject of specific decree-laws, were to be presented by the government on 10 January. For officially "technical" reasons, they are not ready yet. " We want to do things well ", Was justified the president of the Council Giuseppe Conte. But it is actually an umpteenth standoff between Luigi di Maio and Matteo Salvini on the citizen income that is behind the delay.

A promise that was to benefit "Five million poor people"

Initially, this project provided an envelope of 9 billion euros in order to be able to pay to the unemployed and pensioners (1) as well as to members of families living below the poverty line, a maximum monthly allowance of 780 € net for one single person, and 1 330 € maximum for families, and this from 1 February. In addition, more than one billion euros was to be earmarked for the reform of the employment centers.

From now on, the citizen's income will only be able to count on a fund of 6.1 billion euros, and could even be postponed to 1st April. According to experts from the Italian Parliament's Budget Commission, 450,000 people in the end could receive the € 780, while 1.7 million poor families would receive € 1,330. But the 5-star movement had promised that this citizen income would benefit "Five million poor people". Another problem: the League demands that the 260 000 invalids who receive 280 € of pension per month also get the 780 € financed by the same fund.

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Although this assistance is matched, for the unemployed, obligations such as the acceptance of a job from the third offer, or tax breaks for companies that will hire, the opposition says it will not bring more social and productive stability in the country. Especially since the citizen income will be guaranteed for a period of 18 months.

In fact, the M5S begins to seriously suffer from Luigi Di Maio's risky statements about the abolition of poverty ". Voters, especially those in the southern regions, the largest electoral pool of the Movement, fear that his generous commitments will be reduced to a trickle. From now on, the League is 7 points ahead of the M5S in the voting intentions (31% against 24%).

Be that as it may, in seven months of government, neither the League nor the M5S have succeeded in demonstrating the merits of their revenues to revive Italy. The National Institute of Statistics indicates that industrial production fell by 1.6% in November over a month. Which leaves one fearing a recession.

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The Italian economy in figures

Italian economy suffers from soft growth since the beginning of the 2008 crisis. In 2018, ten years after the bankruptcy of the US Bank Lehman Brothers, the GDP of the boot is expected to grow by 1.1% (1.6% in France, 1.7% in Germany and 2.1% in the euro zone). It will be 1.2% in 2019 and 1.3% in 2020.

Unemployment should go from 10.7% of the active population in 2018 to 10.4% in 2019 then 10% in 2020.

The budget deficit according to the European Commission, from -1.9% in 2018 to -2.9 in 2019 and 3.1% in 2020. These forecasts were made by the European Commission before Rome presented the new version of its budget, which is counting on a deficit of 2.04% of GDP in 2019, which should change the situation for the following years if this forecast is realized.

Source: European Commission.

Anne Le Nir, correspondent in Rome