The Balanced Budget in the Italian Constitution: The Evolution of Article 81 and the Sustainability of Public Finances

This paper examines the constitutional principle of budgetary balance in the Italian legal system, focusing on the evolution of Article 81 of the Constitution and its implications for the sustainability of public finances. The original constitutional framework, as adopted in 1948, is analysed as a model centred on procedural budgetary constraints and parliamentary responsibility, which allowed for a broad margin of political discretion in fiscal policy and did not constitutionalise budget balance as a binding objective. Against this background, the paper reconstructs the progressive transformation of the constitutional discipline of public finance, culminating in the 2012 constitutional reform that introduced the balanced budget principle into Article 81. Particular attention is devoted to the interaction between domestic constitutional law and European fiscal governance, highlighting how supranational constraints have influenced national constitutional choices and reshaped the relationship between democratic decision-making and fiscal discipline. The analysis adopts a legal-institutional perspective informed by public finance theory, examining the effects of constitutional budgetary rules on fiscal sustainability, public expenditure, and the allocation of budgetary responsibilities. The paper also considers the role of constitutional adjudication in mediating the tension between fiscal constraints and the protection of fundamental rights. Overall, the study aims to contribute to the debate on constitutional budgeting by assessing the impact of the balanced budget principle on the structure and functioning of public finance in Italy.