Conte has not yet come to terms with the Superbonus debt

“We are the ones who pursued a progressive policy,” said Giuseppe Conte at the Festa dell’Unità in Reggio Emilia, recalling the years of the ‘giallorosso’ coalition government – the years of the fight against Covid, the freeze on redundancies and the agreement on the Next Generation EU fund. But the former prime minister – already described by a former secretary of the PD as “a key figure for all progressive forces” – added the restoration of public finances to the list: “We got the country back on its feet: in three years, we reduced the public debt-to-GDP ratio by as much as 20 points.”

To portray the years of public finance turmoil as an era of fiscal responsibility is a disregard for the truth: a reckless move from both a historical and a political perspective. First and foremost, because Conte is referring to a period spanning three different governments. 

Public debt, having shot up by 20 percentage points from 133.9 per cent in 2019 to a peak of 154.4 per cent in 2020 – the year of the severe recession caused by Covid – returned to 133.9 per cent in 2023. However, during this period, there have been three successive governments with three different ruling coalitions: Conte (until February 2021), Draghi (2021–2022) and finally Meloni (from late October 2022 onwards). Each government passed a Budget Law: Conte for 2021, Draghi for 2022 and Meloni for 2023. Therefore, attributing the entire decline in debt solely to the ‘giallorosso’ government is, on the part of the M5S leader, factually incorrect.

In reality, Conte’s statement contains an element of truth which, however, makes it all the more grotesque. This three-year period, in fact, from the point of view of public finances, has been dominated by a measure introduced in 2020 by his government: the Superbonus. The 110 per cent tax credit for renovations, together with other building incentives, will have cost around 220 billion euros by 2023. The Superbonus alone has cost 160 billion, peaking at over 80 billion in 2023.

The point, however, is that from an accounting perspective, these tax credits were included in the deficit for the years in which they were issued (2021–2023) but not in the public debt. This is because, formally speaking, during those years they were held by the banks that had purchased them, and only upon their maturity were they gradually added to the public debt. As regards the Superbonus (i.e. excluding other building grants), the impact on the public debt up to 2023 amounted to just 20 billion out of a total of 165 (12 per cent), whilst it became significantly heavier as the credits matured, in subsequent years, rising to 38–39 billion per year (2027, with 21.5 billion, will be the last year with such a hefty bill). This means that whilst, between 2021 and 2023, Superbonus expenditure had an impact on GDP growth and tax revenue but not on public debt, from 2024 onwards the opposite occurred: the effect on GDP and revenue ceased, and the burden on public debt became apparent. The dynamic is similar to that of excessive alcohol consumption: the initial euphoria is eventually followed by a hangover.

For this reason, in the years that followed, despite Minister Giancarlo Giorgetti at the Ministry of Economy and Finance (MEF) having reduced the deficit from 8.1 per cent in 2022 to 3.1 per cent in 2025, public debt has risen again to 137.1 per cent in 2025 and is forecast to reach 139.2 per cent in 2027, when it will be the highest in Europe.

The Superbonus has thus created an optical illusion: the debt falls when the deficit stands at 9 per cent and rises when the deficit is reduced to 3 per cent. However, it would be unwise to conclude that reducing debt requires increasing the deficit, since debt is simply the accumulation of deficits. If Conte’s narrative about a decline in debt under his government is historically inaccurate, the most worrying prospect for the future is the possibility that he may again lead the country with the same reckless fiscal policy: to err is Superbonus, to persevere is default.