Budget Balance in the 2012 Constitutional Reform

Name: Budget Balance in the 2012 Constitutional Reform
Brand: Vita e Pensiero
Price: 6.00 EUR
Availability: OnlineOnly

digital

Article

Magazine

RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI

Issue

RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI - 2018 - 4. An Issue in Honour of Giacomo Vaciago

Title

Budget Balance in the 2012 Constitutional Reform

Author

Piero Giarda

Publisher

Vita e Pensiero

Format

Article |

Pdf

Pages

Online from

05-2019

Doi

10.26350/000518_000019

Issn

0035-676X (print) | 1827-7918 (digital)

€ 6.00

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Description

The Italian Constitution was amended seven years ago to set two new constitutional principles: budget balance and public debt sustainability. The first rule allows for a budget deficit and countercyclical budget policies when the economy suffers cyclical downswings, and in other exceptional economic conditions to be defined by special legislation. The new Constitution restricts debt financing options, excluding deficit spending as a tool to foster long term dynamics of aggregate demand. The reform has not provided automatic mechanisms to prevent violation of the principles; it also seems that the Constitutional Court will have limited power to defend them. A balanced budget will thus suffer the destiny of other relevant constitutional principles, such as the progressivity of the tax system, the fiscal autonomy of regional and local governments, equal levels of protection in the supply of public services. The application of liberal or social ethics in public policy still lacks political defenders.