This Budgetary Planning Report is devoted to analysing the 2016 Economic and Financial Document (EFD) presented by the Government on 8 April this year.
The Report presents and examines the substance of the parliamentary hearing of 19 April, expanding on the analysis of the macroeconomic and public finance forecasts and the assessment of compliance with national and European fiscal rules presented on that occasion.
The report is organised into five chapters. The first is devoted to an analysis of the EFD’s macroeconomic forecasts for the period 2016-2019, their validation and a discussion of the risks inherent in the economic scenario, underscored by the positioning of the Government forecasts with respect to the projections of the panel of independent forecasters (including the PBO). Additional risks associated with the expected developments in exchange rates are then analysed.
The second chapter examines the trend and policy scenarios for the public finances, developments in the public debt and the threats to the sustainability of the public finances. Specific attention is devoted to information available on derivatives transactions conducted by the Treasury and local governments and their impact of the evolution of the public debt.
The third chapter assesses the public finance policy objectives set out in the EFD in the light of national and supranational fiscal rules, focusing in particular on the adjustment path towards the medium-term objective delineated in the policy scenario and indicating the extent to which that scenario is consistent with the current interpretations of the European fiscal rules as transposed into domestic law.
The fourth chapter offers an initial evaluation of the status of implementation of the measures required by the activation of the two flexibility clauses envisaged under the Stability and Growth Pact invoked by the Government in the policy documents issued last year: the first section examines the programme of national public investments, including with regard to the Investment Plan for Europe, while the second assesses the progress of the structural reforms.
Finally, the fifth chapter is devoted to specific examinations of a number of areas of the structural policies set out in the NRP, providing an initial review of the issues and the actions taken, with a focus on the Jobs Act and the reforms of the education and justice systems.