There European Commission cut the estimates further growth Italy and legalized it, after pressure Recovery planRome will return lifting the back in Europe. Demonstrates the fact that bet Where Pnrr – took out Italy vicious circle from “zero point” and guarantee sustainability debt – Formerly is lost. In its autumn economic forecast, Brussels revised this year’s GDP downwards (+0.4%versus 0.7% shown in the spring) and 2026, which will close at +0.8% from the previous 0.9%. This estimate is slightly better than the government’s estimate Public financial policy documentshowever only Ireland experienced worse conditions (+0.2%). And the expected value in 2027, the first year post-Recovery, raises concerns: a further +0.8% is the lowest figure in the entire EU which overall would move between +1.4% (Eurozone) and +1.5% (EU 27).
Italy is again in a vicious circle
Commissioner for Economic Affairs Valdis Dombrovskis He explained that Italy’s current “modest” dynamics are mainly supported by family consumption and public investment, of which Recovery remains “main”. motor“With new obstacles Stability Pact which regiment is the budget policy Meloni’s government – who signed the Pact – the end of the Plan would reveal the atavistic problems of the lowlands productivity – and the resulting low growth – which should be resolved by investment and Pnrr reform.
A failed attempt, apparently, was the cause resource deployment, delay in spending money, bureaucracy and reporting that ultimately matters more than results. Therefore, although there are expectations of “recovery in financing and investment for cohesion” anticipated by Dombrovskis himself and despite it facility which should allow the remaining Pnrr resources to be depleted by 2029, here’s the vicious circle again. Also supported by consumption very weak families, as the commissioner explained, and “further increase savings precautionary measures”. Without the billions in non-repayable loans and grants coming from the EU, Italy would have ended the year in recession. Downstream of Pnrr, the economy will return to an equilibrium of low wages and low productivity. The government says so itself: in the Public Finance Program Document, Mef engineers estimate that amount growth potential average in the period 2026-2041 (which Italy can obtain structurallyafter deducting the economic cycle) of 0.6%, lower than last year’s estimate of 0.8% Medium term budget structural plan required by new European regulations.
“Meloni’s government is taking us back to the basics of Europe,” attacked the M5S MEP Pasquale Tridico, spoke of “outright rejection of the executive’s economic prescriptions” including “the latest budget law.” accountancy“. “There’s no point in going infringement proceduresIn fact, the Commission sees Italy’s deficit at 3% in 2025, 2.8% in 2026, and 2.6% in 2027, exactly what the government indicated in the Dpb. And in April, with definitive data in hand, Brussels will decide on the possibility of a shutdown deficiency procedures. Preparation for activation security clause which allows you to increase your investment defense without impacting on a significant deficit in the eyes of the Commission.
European Comparison
Returning to growth, comparisons in Europe are stark. This year Roma only performed better than Finland (+0.1%) and Germany (+0.2%). By 2026, the country will be second to last, ahead only of Ireland. In 2027 its ranking will close, behind France (1.1%) and Germany (1.2% like Austria and Finland). Berlin, after five years of weak growth, will again move faster than Italy. What supported Germany’s recovery was expansion public spending, consumption stability and investment in construction and infrastructure driven by budget policy very expansive: deficit of 4% in 2026 and debt growth towards 67% of GDP. Meanwhile exports will continue to suffer from tariffs, global uncertainty and weak overseas demand.
On the opposite side of the ranking, Spanishwhich continues to be the fastest growing large economy in the Eurozone. Brussels has revised its forecasts upward: +2.9% in 2025 and +2.3% in 2026, with growth supported by internal requestfrom labor market solidity and investment contributions. The estimated increase in employment, according to Brussels, is mainly due to the continuous influx of workers migrantwhich significantly expands the workforce and accelerates the rate of job creation. That unemployment rate because it will keep going down: 10.4% in 2025Then below 10% in 2026 and 2027. Such levels have not been seen in Spain for more than a decade, although they are still among the highest in the EU.
Risks associated with tariffs and the “AI bubble”
The framework created by the Commission remains open risk important. Apart from geopolitics, the main factor is related to dynamics originating from abroad. “Globally, that is trade barriers had reached a historic high,” Dombrovskis recalled. Of course, tariffs had an impact Donald Trumpdespite sub-judicial conduct by the Supreme Court, and “responses from other key players such as China”. European exporters continue to face adverse conditions: “The average tariff level faced by EU exporters to the US is in the range of 10%”, which is “well above the average tariff before the Trump administration took office”. A context that weighs on a “highly open” economy, “vulnerable to trade restrictions and ongoing uncertainty”. In finance, another factor of instability comes from Wall Street. “Risk price correction in the stock market, especially in American technology sector, could have an impact on believe investors and financing conditions”.
