The Focus Paper (revised edition of 23 November) examines the implementation of the measures granting advances to regional governments to enable them to settle their commercial payables, with a view to assessing the impact on the public finances of the accounting treatment adopted by a number of such governments (no sterilisation of advances on an accruals basis), which was subsequently criticised by the Constitutional Court (Ruling 181/2015) and recently regulated with new legislation (Decree Law 179/2015). The analysis finds that the non-sterilisation of the advances did not, in general, lead to an increase in expenditure over the levels envisaged in the Domestic Stability Pact and, therefore, over the amounts reported in the general government accounts. On the other hand, non-sterilisation may have enabled the regions to effectively avoid the accounting constraints concerning the elimination of deficits and the consequent adjustment measures to reduce spending by more than provided for in the Domestic Stability Pact. Decree Law 179/2015 creates a solution that, while requiring sterilisation of the advances in the regional accounts, with a consequent increase in deficits, enables the regional governments to eliminate the deficit over the same number of years as the repayment of the advance, in the amount of the advance received. The savings required are therefore identical to those that would have been required of the governments in the case of non-sterilisation.
Text of document (in Italian)