Brussels, 07/09/2011 (Agence Europe) - “There is no European strategy for austerity”, said the European Commission on Wednesday 7 September: everything that we are doing in terms of “budgetary consolidation” goes hand-in-hand with what we recommend to “boost growth and employment” as part of the EUROPE 2020 strategy. Nonetheless, it favourably welcomed the latest austerity measures announced in Italy and Greece the day before.
Italy. Silvio Berlusconi's Italian government has revised an austerity plan estimated at €45 billion, following the one put at €48 billion, which was presented earlier this summer. These measures “confirmed the determination of the Italian authorities to meet the agreed targets of deficit and debt reduction, whilst contributing to tackle the deep-rooted structural weaknesses of the Italian economy”, stated the Commission in a press release published on the evening of Tuesday 6 September. The package of measures, which has been rejected and amended several times, aims to allow a return to budgetary balance in 2013. It includes the following provisions: - increasing VAT to 21%; - a levy of 3% on incomes of €500,000 a year and more; - raising the legal retirement age for women in the private sector to 65 from 2014 ; - introducing a “golden rule” on budgetary discipline into the Italian constitution. According to the Commission, “the confirmation of the decision to introduce in the constitution the principle of a balanced budget and the abolition of provinces are decisive improvements in the institutional framework of Italy, and contribute to ensure budgetary discipline on a permanent basis”. The €45 billion plan was announced during August, when Italy became the target of the financial markets, which had misgivings over the ability of the country, which faced low levels of growth, to bring down its deficit and pay back its massive debt (€1900 billion, or 120% of national GDP). The costs of refinancing the Italian debt have reached levels that are difficult to sustain. Thousands of Italians took to the streets on Tuesday to protest against government policy.
Greece. The Greek authorities announced that they were speeding up the implementation of the privatisation programme which is forecast to bring in €50 billion by 2015, €5 billion of it in 2011. A first raft of assets (extension of the concession of Athens airport, selling public shares in the gas company Depa and the oil company Helpe and a first set of immovable assets, new mobile telephone licences) have been transferred to the operational fund of the state assets. The Greek government will also immediately move forward on reducing the size of the public sector. “This shows that there is extra work to be done”, notes the Commission, which announced that the troika (Commission, ECB, IMF) would carry out an in-depth analysis of the measures taken. Speaking before the European Parliament, Commissioner for Economic and Monetary Affairs Olli Rehn said that the troika could be back in Athens “next week”, after deciding to suspend its mission (EUROPE 10444). (M.B./transl.fl)