The discipline of the balanced budget is constantly evolving, especially in the face of the new financial needs to combat the pandemic.
This paper, studying the structured economic governance after the debt crisis, the resulting Italian choices regarding the constitutionalisation of the balanced budget and the consequences on local autonomies, demonstrates how the public finance management system at EU level is being completed, generating a cyclical regulatory relationship between the European and local levels.
A conflict emerged between the Regions and the State, which is analyzed in order to understand the constitutional justice of a balanced budget, observing the need for balancing the financial balance and the protection of social rights. The Constitutional Court has recently conferred on the Italian Court of Auditors, the power to carry out a direct control of the budget balance of national and territorial bodies.
Particular attention is given following the effects of the Covid-19 pandemic on the budgets of the States. In the face of the pandemic crisis, for the first time since the approval of the TSCG, the Commission activated the general safeguard clause to suspend the Stability Pact (so-called escape clause). This clause allowed countries to resort to budget variances.
Finally, the “Next Generation EU” plan is analyzed, which centralizes loans to Member States in the Union budget and draws the necessary resources from the capital market to finance a total of 750 billion, through the issue of “Eu Bills” “. For the first time in history, the Union, in the words of the Commission, acts on the markets as if it were a state. The extraordinary scope of the NGEU, with the issuance of European bonds, leads to a substantial mutualisation of debts and appears as a fundamental step towards an europeam federal system.