Euro zone finance ministers meet today and will have one eye on budgetary matters given a Tuesday deadline for member states to send their draft budgets to the European Commission for inspection, and with protracted German coalition talks keeping other meaningful euro zone reform measures on hold.
Most draft budgets are in but we’re still waiting on Italy and Ireland. Dublin will unveil its programme on deadline day. Italy’s situation is more fluid so we may get something today.
Over the weekend, Dublin said it may quit its bailout by the year-end without any backstop in the form of a precautionary credit line. That would rule it out for ECB bond-buying support, which it probably also doesn’t need. But it needs at least the 1.8 percent growth forecast for next year to keep bearing down on debt.
Meanwhile, we got hold of documents showing Italy plans to give banks and insurance companies more speedy tax breaks on loan losses and writedowns to help them to clean up their balance sheets and get lending again.
For Rome, the aim is to agree a 2014 budget that cuts labour taxes but also meets the 3 percent of GDP deficit limit. Taxes and social contributions paid by Italian firms are among the highest in the world.