On March 11, 2011 the Heads of State or Government of the Eurozone endorsed the Pact for the Euro. At the 24/25 March 2011 European Council, the same Heads of State or Government agreed on the Euro Plus Pact and were joined – hence the ‘Plus’ – by six others: Bulgaria, Denmark, Latvia, Lithuania, Poland, Romania (leaving only the UK, Czech Republic, Sweden and Hungary out).
The objective of the pact is to foster competitiveness, foster employment, contribute to the sustainability of public finances and reinforce financial stability. In the Euro-Plus-Pact the Heads of State or Government have entered into commitments on a number of policy areas, in which member states are competent.
What political/legal difficulties did Italy encounter in the negotiation of the Euro-Plus-Pact, in particular in relation to the implications of the Pact for (budgetary) sovereignty, constitutional law, socio-economic fundamental rights, and the budgetary process.
The pact was negotiated at the time by the government in charge (Berlusconi IV), with no formal ex-ante involvement of the Parliament.
It is therefore difficult to exactly trace the related institutional debates, at least in formalized terms.
Talking about political/legal difficulties, one can say the government did not meet specific obstacles in the negotiation, even though the objectives of the Pact are also considered as historical Italian weaknesses.
What other information is relevant with regard to Italy and the Euro-Plus-Pact?
Italy did not take measures directly and formally categorized as a “reaction to the Euro-Plus-Pact”, as other Members States did.
But if one considers the immediate reaction to the Pact, it is important to highlight that on 6 July 2011, following the activities of the European Semester and a number of informal “letters” between the EU institutions and the Italian government , the Italian government approved the decree n. 98/2011, containing «urgent measures for financial stabilization», then converted by the Italian Parliament by Law n. 111/2011 on 15 July 2011.
On 12 July 2011 the Italian Parliament also converted the so called «development decree» (“Decreto sviluppo”) n. 70/2011 by Law no. 106/2011. With these measures, the Italian Government intended to comply with the «European commitments», i.e. to implement the recommendations on the National Reform Programme and the Stability Programme.
On 21 July 2011, the ECOFIN Council declared to be satisfied of the measures taken, approving «the package of budgetary measures recently presented by the Italian government, which will allow it to bring the deficit below 3% in 2012 and to achieve a balanced budget in 2014».
Given the traditional varied composition, and the consequent unsystematic quality, of the Italian legislative texts, and in particular of the Decrees of the government, it is difficult to exactly describe the «economic/social» substance of the aforementioned measures.
Law 111/2011 includes, in particular, various but important reforms for «reducing the costs of the political institutions» (Law n. 111/2011, Chapter 1, Articles 1-8), for the «rationalisation and monitoring of government expenditure» (Law n. 111/2011, Chapter 2, Articles 9-15), for the «containment and rationalization of the public expenditure on public sector employment, health, social security, school organization», and on the participation of the regional and local institutions to the financial stabilization (Law n. 111/2011, Chapter 3, Articles 16-20), for «financing the urgent expenditure measures» (Law n. 111/2011, Chapter 4, Art. 21 – 22), in the field of tax redistribution (Articles 23-25) (Articles 26-39) (Articles 40-41).
Law 106/2011, on the other hand, includes reforms on tax credits for investments in the field of scientific research (art. 1), tax credits for investments and hiring programs in the Southern part of Italy (art. 2); administrative simplification for business (artt. 3 and 8) and for the construction of public infrastructure (art. 4) and private buildings (art 5); other administrative simplification measures for small and medium-sized enterprises (art. 6); simplification of tax measures (art. 7); measures for meritocracy in school and in research (art. 9); simplification of some public services offered to citizens (art. 10).
The Italian rules on the budgetary process have undergone, in the last four years, important reforms. In 2009 the so called new “national accounting law” (L. 31 dicembre 2009, n. 196) was enacted, and soon some new amendments in 2011 (L. 7 aprile 2011, n. 39) to (obviously) adapt it to the new European standards, including the timing of the European Semester. Moreover, a new Law n. 234/2012 on «general rules on Italy’s participation in the formation and implementation of legislation and policies of the European Union» was adopted (see Question VIII.6).
In terms of parliamentary procedures, the Camera dei deputati has adopted, through two special “opinions” of its “Giunta per il regolamento” of 6 October 2009 and 14 July 2010, an «experimental procedure» for the exercise of the control of subsidiarity and the of the «political dialogue» with the European Commission and the European Parliament.
But no formal changes have been made in order to specifically comply with the Euro-Plus-Pact.