Brussels, 02/11/2011 (Agence Europe) - In an emergency cabinet meeting in Rome on Wednesday 2 November, the Italian government will be deciding on the tangible details of the austerity programme agreed with the European Union (see EUROPE 10483), with details to be unveiled to partners at the G20 by the Italian prime minister, Silvio Berlusconi in Cannes on Thursday 3 November. The measures may take the form of amendments to the stability bill to be voted upon by the Italian Senate and Chamber of Deputies on 15 November.
The amendment will include measures to sell off public goods, develop the Mezzogiorno, liberalise the economy, privatisation, company finance aid and tax breaks for companies investing in infrastructure. There will be measures covering energy, cutting red tape and 26 provisions to boost infrastructure and finance large-scale works undertaken by the private sector. It is possible that the measures will be introduced into law immediately.
Other measures are in “reserve”, and will be introduced in the event of the crisis deepening, such as a property tax, a tax agreement whereby tax payers will be able to agree with the tax office on future taxes in exchange for fewer tax inspections, an increase in the rates (increasing the rateable value of property) and possibly increasing the retirement age to 67 in 2026.
For the labour market, measures to be introduced immediately include apprenticeships for young people and work experience and part-time contracts for women, but the main measure (demanded by the EU but not yet decided upon) is reform of labour law to make it easier to make people redundant.
Flagship measures are the sale of public goods, particularly real estate (which could boost the state's coffers by some €5 billion) and a special real estate fund might be set up, to which would be added buildings identified by local authorities and regions. This would make it easier for the Italian Treasury to get its hands on the cash, which would otherwise cause problems at local and regional level. Another important measure under discussion is the redeployment of €8bn for investment in the south of the country, savings achieved by negotiating a reduction in the amount of finance required of Italy for programmes jointly funded with the EU, but this will depend on the regions in question agreeing on the question with the European Commission (Commissioner Hahn will be meeting the relevant Italian minister next week), but Italian newspaper Il Sole 24 Ore suggests that this could be rushed through.
On the liberalisation front, the measures under discussion cover local public services to force local authorities to investigate outsourcing options for services. Italy's competition authority could be given greater teeth to ensure contracts are put out to public tender or outsourced in other ways.
The government may decide to speed through the tax breaks for company deleveraging, in addition to the measures that come into force this year to help companies raise finance without getting into debt.
The government is split over many of the above measures, such as the increase in the retirement age and property tax, but time is pressing and Italy's partners (and the European Central Bank) are applying pressure for credible measures to be introduced rapidly to calm nerves on the markets. It remains to be seen whether Wednesday's emergency meeting will do the trick. (FG/transl.fl)