Public Finance Decision (DFP – Decisione di Finanza Pubblica)

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According to the new public finance and accounting law (Law No. 196 of 31 December 2009), the Government submits to Parliament the Public Finance Decision (DFP) which is a three-year spending review superseding the Economic and Financial Planning Document (DPEF).

Pursuant to Art. 10 of Law No. 196 of 31 December 2009, the DFP outlines the international economic and financial situation, both for the current year and the following years of the forecast period, as well as Italy’s macroeconomic projections based on both unchanged legislation and policy scenarios, for each year of the forecast period. In addition, the DFP illustrates the main economic parameters used for the public finance projections consistent with macroeconomic trends (based both on unchanged legislation and policy scenarios).

The DFP contains year-on-year figures - at unchanged legislation - for the General Government Accounts, the cash balance and the borrowing requirement, relating to both the total amount and a breakdown of costs by the various subsectors making up general government: i.e. the central administration as well as local government, and welfare and social security entities. The DFP also contains the figures (at unchanged legislation) relating to the overall tax burden, the net balance to be financed (of the State sector) and the State sector borrowing requirement. Moreover, for the whole forecast period, the DFP provides an overall outline of the resources needed to confirm the economic policy interventions and budget commitments in the various expenditure sectors (according to the so called no-policy change assumption).

Similarly, the DFP contains the General Government policy scenario and the fiscal adjustment measures needed to meet the fiscal targets, and the contributions of each sub-sector of General Government. The policy targets for each year of the forecast period, as a percentage of GDP, are shown as both net and gross of interests and of possible one-off measures (the latter have no impact on the structural net borrowing of General Government).

Besides, the DFP identifies possible draft statutory instruments connected to the fiscal adjustment, each of which contributes to meeting the policy targets set in the DFP, through different kinds of legislative measures, as well as through economic interventions to revitalize and foster economic growth. The DFP also contains figures on potential output and General Government structural balances (based on the policy scenario). The DFP includes the contents of the Convergence Pact, the Internal Stability Pact and the penalties local government may incur in case of failure to meet the targets set in the Internal Stability Pact.

The Government must submit the DFP by 15 September. The new date for the submittal to Parliament is now closer to that for the submittal of the draft Stability and Budget Laws, whose deadline is October 15.

In the event of any significant change to the public finance targets based on the policy scenario or in case an additional fiscal adjustment is needed, the Government submits an Update to the DFP. The DFP is supplemented by policy reports on every expenditure mission and on the multi-year expenditure laws, including a progress report on their implementation.

• Public Finance Decision (DFP) 2011-2013
  ( PDF, 817 Kb )
• Relazione allegata alla DFP per gli anni 2011 - 2013 (Italian version)
  ( PDF, 956 Kb )
• Nota Metodologica (Italian version)
  ( PDF, 1953 Kb )