WRITTEN QUESTION No. 312/98 by Karla PEIJS to the Commission. Spending commitments in Italian Government finances
Date: 1998-02-10
Institutions: European Parliament, PEIJS
Subjects: Economic and Monetary Union, Italy, budgetary control, budgetary procedure, credit policy, financial legislation, gross domestic product, public finance

17. 7. 98

EN

Official Journal of the European Communities

C 223/165

(98/C 223/214)

WRITTEN QUESTION P-0312/98

by Karla Peijs (PPE) to the Commission

(10 February 1998)

Subject: Spending commitments in Italian Government finances

In the Netherlands Second Chamber the following questions were put to the Dutch Finance Minister. Will the
Commission also answer these questions with a view to ensuring the greatest possible objectivity in relation to
Italy(cid:146)s position?

1.
Is  the  Commission  aware  of  reports  concerning  the  build-up  of  unspent  budgetary  carry-overs  (the
so-called (cid:145)residui passivi(cid:146)) in Italian Government finances, involving expenditure authorized by parliament to
which the Finance Minister has apparently allocated no or reduced cash resources (1)?

2.

Is it true that at the end of 1997 the (cid:145)residui passivi(cid:146) amounted to some 10% of GDP?

Does the Commission share the view that building up spending commitments in this way increases the risk

3.
of a rise in expenditure that will be difficult to control in the future?

4.

Is the existence of (cid:145)residui passivi(cid:146) a relevant factor in admission to EMU?

Is the Commission also aware of the sale of 540 tonnes of gold by the Italian Reserve Management Bureau

5.
to the Bank of Italy (2)?

(1)  Financial Times, 16 December 1997.
(2)  Reuters, 11 December 1997.

Answer given by Mr de Silguy on behalf of the Commission

(16 March 1998)

In  the  Italian  budgetary  procedures,  the  Parliament  allocates  funds  on  both  a  commitment  and  a  cash  basis.
Budget appropriations are typically higher than what the administration actually spends. Funds that are not used
in the year, the so-called (cid:145)residui passivi(cid:146), can be carried over to following exercises. Each year, the sum of the
new  appropriations  plus  the  residuals  from  the  previous  years  represents  the  (cid:145)spending  potential(cid:146)  of  each
ministry, local authority or state agency. On the basis of this (cid:145)spending potential(cid:146) each institution may require the
crediting of funds from the Treasury, up to the cash ceiling fixed by the Parliament. Funds are then transferred to
the current accounts of the relevant institution and held as ready-to-be-spent liquidity.

In 1997, the Parliament imposed strict limits to the cash budget and to the use of Treasury funds. As a result, the
existing liquidity reserves of many government agencies were absorbed, but the size of unspent appropriations,
the (cid:145)residui passivi(cid:146) grew significantly. According to provisional estimates, their amount, cumulated over many
years in which actual expenditure remained below budgetary appropriations, might have reached around 10% of
gross domestic product (GDP) at the end of 1997.

The existence of the (cid:145)residui passivi(cid:146) does not represent a danger for future expenditure, as long as the Parliament
maintains limits to the cash budget which are consistent with its overall budgetary targets. This is indeed the
approach which has been decided for the next three years with the budget law for 1998. In addition, the Italian
government is presently designing new legislation which fixes limits to the proportion of (cid:145)residui passivi(cid:146) that
can be carried over to the following year and cancels part of the existing stock.

The Commission will present an assessment of the sustainability of the Italian budgetary position, as well as that
of  other  Member  States,  in  its  report  on  convergence,  in  accordance  with  Article  109j(1)  EC  Treaty,  to  be
released by 25 March 1998.

The issue of the taxes paid on a transaction of gold from the (cid:145)Ufficio Italiano Cambi(cid:146) to the (cid:145)Banca d(cid:146)Italia(cid:146) is
covered in the answer to the Written Question P-0311/98 by Ms. J.R.H. Maij-Weggen (1).

(1)  See page 164.