Carlo Cottarelli: I would take away the 500 euro bonus for 18-year-olds. No other country does this

Economist Carlo Cottarelli, director of the Observatory on Italian Public Accounts at the Catholic University of Milan, speaking yesterday morning on the program Agora on Rai Tre, said he would abolish the culture bonus for 18-year-olds. The statement is part of the more general framework of a possible scenario for the financial maneuver that must be ready by the end of the year and will take effect in 2020.

Interviewed by journalist Monica Giandotti on the proportions that the financial maneuver will have to have, Cottarelli said that “regarding the difficulty of hitting the budget targets, for next year the target should be 2.1 percent of the deficit-to-GDP ratio. In order to reach this goal without increasing VAT, we need to find currently not the original 23-25 billion, because some effect was already there this year, because things are going a little better, but at least, in my opinion, about 15 billion. It is not impossible but it is very difficult. But if you then say ’we want to cut the tax wedge, we want to give more money to families, we want to do this and this,’ well, then it becomes really quite impossible I would say.”

Giandotti pointed out that, precisely on the tax wedge, it would already “seem to be revealing the first distance between the Pd and the 5 Star Movement,” in the sense that they both say that we need to cut taxes on labor,“ however, the Pd proposes to in paychecks to workers and the Movement says instead to give them to entrepreneurs. Cottarelli responded by saying that ”before saying how to spend this money we should find it. The main difficulty is to find them. The low spread will save us in the long run. In the immediate term, the savings are much lower. When I say we would need 13-15 billion to find for next year already I put in the interest rate savings. You would need to find spending savings I think around 13-15 billion. If you want to hit the deficit target. If we want to have a higher deficit then you have to see how the markets react, how the European Commission reacts. So we come back to the basic point: to at least find the money to raise VAT. Then you may raise the VAT, but in my opinion it would be psychologically quite dangerous."

At this point Giandotti asked Cottarelli about what could be saved. And this is where Cottarelli proposed to abolish the culture bonus for 18-year-olds : “we should go and look at the measures introduced in recent years that were perhaps not essential,” the economist argued. “I give an example, although it is a rather small amount: the 500 euros given to those who turn eighteen to buy things that would be related to culture, I would take those away. There is no country that does this, and no country imitated us after we introduced it. The culture bonus, let’s call it that.” However, Cottarelli then also said, “the only thing I would not touch is spending on public education: that is fundamental in Italy.”

The culture bonus had allocations of 290 million euros in 2018 (192 were then spent) and 240 for 2019 (cut to 140 with the growth decree, but later restored). Under the measure, children who turn 18 during the calendar year can spend €500 on cultural products: books, concerts, records, theater tickets, museums. In 2017, total spending was 163 million euros, broken down as follows: 66.5 percent on books, 11.7 percent on music, 10.3 percent on concert tickets, 8.6 percent on cinema, 1.25 percent on training courses, 0.88 percent on theater, 0.42 percent on cultural events, and 0.37 percent on museums and monuments.

In the photo: Carlo Cottarelli at Agora

Carlo Cottarelli: I would take away the 500 euro bonus for 18-year-olds. No other country does this

Warning: the translation into English of the original Italian article was created using automatic tools. We undertake to review all articles, but we do not guarantee the total absence of inaccuracies in the translation due to the program. You can find the original by clicking on the ITA button. If you find any mistake,please contact us.