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Mario Monti's government approves a €30B austerity package of tax hikes, and...

Mario Monti's government approves a €30B austerity package of tax hikes, and benefit/spending cuts for Italy. Also included are steps to fight tax evasion - including a ban on cash transactions above €1K euros. The hope is this will create a balanced budget in 2013 despite a 2011-2012 recession, with zero growth projected after that.
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Comments (24)
  • Eric Stalee
    , contributor
    Comments (91) | Send Message
     
    Well, I guess zero growth sounds promising...
    4 Dec 2011, 08:05 PM Reply Like
  • Losing Paper While Gaining ...
    , contributor
    Comments (497) | Send Message
     
    It's better than a lot of countries have right now.
    4 Dec 2011, 09:46 PM Reply Like
  • davidbdc
    , contributor
    Comments (3183) | Send Message
     
    What Americans should look at is that Italy is cutting 30 Billion in expected spending to reach a balanced budget. We are about 7 times the size of Italy - 210 Billion in spending cuts in the USA would leave us...... with a deficit of 1.1 or 1.2 Trillion!!!

     

    Good for Italy to take solid steps towards fiscal responsibility. I wonder why Monti didn't go all the way. Raising the retirement age to 70 would create surpluses and that would then lower borrowing costs and further relieve the fiscal pressure.

     

    The only answer to the mess is to live within one's means.
    4 Dec 2011, 08:15 PM Reply Like
  • Rhianni32
    , contributor
    Comments (2078) | Send Message
     
    The labor party is pretty strong over there. He can only do so much. I'm surprised he got this much.
    5 Dec 2011, 07:29 AM Reply Like
  • bob adamson
    , contributor
    Comments (4559) | Send Message
     
    Together the three following reports describe the content of the address given by the Italian Premier Monti. Greater details of the plan will be presented to the Italian Parliament within a few hours.

     

    Note in the Globe and Mail report that Berlusconi is threatening that his Party may oppose the budget and try to force an election. Such a disastrous course of action, if successful, is difficult to take seriously but it is disconcerting that the former Premier should be playing games at this point in time.

     

    http://bbc.in/uNmbIA

     

    http://bit.ly/umQIVW

     

    http://bit.ly/vPFHKN
    4 Dec 2011, 08:38 PM Reply Like
  • Angel Martin
    , contributor
    Comments (1341) | Send Message
     
    the headline is misleading, all Monti has is cabinet agreement.

     

    Berlusconi is waiting in the weeds to sabotage this thing and get back into power.

     

    In my estimation the italian political system is less likely than even greece to be able to make the tough cuts
    5 Dec 2011, 11:31 AM Reply Like
  • bob adamson
    , contributor
    Comments (4559) | Send Message
     
    Angel -

     

    Good points. On the other hand Berlusconi and his Norther League allies really have nothing to offer the Italian people other than the breakup of Italy and collapse of the Euro zone and Euro (also, Berlusconi is spending a lot of his time in court now that his immunity from prosecution has ended). Arguably Monti will get sufficient support for the foreseeable future.

     

    Monti's program is, in the circumstances, quite moderate and will attract the support of centre and centre-left Parties that were outside the Berlusconi coalition along with many former Berlusconi allies. The following is quite interesting.

     

    Details on proposed Italian budget proposals

     

    http://bit.ly/uG7LBq

     

    http://bit.ly/vC5vjZ

     

    Possible way in which the IMF may be enabled to assist

     

    http://bit.ly/vPyL8L
    5 Dec 2011, 12:39 PM Reply Like
  • davidbdc
    , contributor
    Comments (3183) | Send Message
     
    Berlusconi is a clown but he deserves some credit for enacting reforms. Italy isn't too far away from a balanced budget as a result - and if they'd raise the retirement age to 70 fairly quickly they would actually begin generating surpluses - which should hypothetically reduce borrowing costs - which would further reduce the overall debt (assuming government doesn't spend the savings).

     

    Italy is in far better shape than Greece. If they would just take the final step and raise the retirement age to 70 they could then turn their attention to structural reforms like tax simplification and collection and corruption. Lets hope that Monti is bold and seizes the opportunity in front of him - from this proposal it appears he's trying to do the least amount - that isn't going to solve the problem.
    5 Dec 2011, 12:54 PM Reply Like
  • cynic2011
    , contributor
    Comments (652) | Send Message
     
    the article doesn't say if the E30 billion is an annual number or the total over a period of years.

     

    In relation to the total debt of E1.9 trillion,the E30 billion is pretty pathetic.

     

    this has to be approved by the Parliament,so don't hold your breath.
    4 Dec 2011, 09:38 PM Reply Like
  • Erick McKitterick
    , contributor
    Comments (849) | Send Message
     
    Agreed the Italy GDP is just north of 2 Trillion. 30B is nothing!
    5 Dec 2011, 08:42 AM Reply Like
  • fxmaven
    , contributor
    Comments (1455) | Send Message
     
    this was enacted as an emergency decree, no parliament required.

     

    just like the implementation of unlimited detention/arrest can negate the US constitution with the stroke of a pen, now all your social programs can be wiped out at the stroke of a pen.
    4 Dec 2011, 11:44 PM Reply Like
  • mattdaddy
    , contributor
    Comments (52) | Send Message
     
    Wrong, Parliament has to approve this decree within 60 days. He has his work cutout for him.
    5 Dec 2011, 01:23 AM Reply Like
  • WMARKW
    , contributor
    Comments (10690) | Send Message
     
    "including a ban on cash transactions above €1K euros. "

     

    Coming to America soon.
    4 Dec 2011, 11:50 PM Reply Like
  • Eric Stalee
    , contributor
    Comments (91) | Send Message
     
    Probably so. That way banksters don't have to pay up and face a liquidity crunch.
    4 Dec 2011, 11:54 PM Reply Like
  • fxmaven
    , contributor
    Comments (1455) | Send Message
     
    i don't think that's going to undo thousands of years of tax evasion and cash business in italy. especially not in sicily.
    5 Dec 2011, 12:08 AM Reply Like
  • dividend_growth
    , contributor
    Comments (2898) | Send Message
     
    Never going to happen in America.

     

    People are already up in arms over the much more benign "Obamacare".
    5 Dec 2011, 05:31 AM Reply Like
  • edsanville
    , contributor
    Comments (73) | Send Message
     
    @Эрик - I was trying to think of the government motive for this law... and you nailed it! Thanks!
    5 Dec 2011, 08:55 AM Reply Like
  • Eric Stalee
    , contributor
    Comments (91) | Send Message
     
    I think we probably said something along the lines that we would never have prison camps like the nazis or the communists either.

     

    Japanese. Oopsies.

     

    "Never going to happen here" is ignorant. I'm sure people believed that dictatorships would never happen in Rome either. That didn't work out so well.
    5 Dec 2011, 10:08 PM Reply Like
  • mitrado
    , contributor
    Comments (2018) | Send Message
     
    Well, this is Democracy... ain't it!?

     

    All over Southern Europe, the people elected criminals for more than 3 decades... and nowadays, even if some people complain, the majority keeps voting on the same parties over and over again.
    So, to hell with the people. People are paying the crisis... and that's exactly what they should get, for their prolonged and blatant stupidity. After all, we all must live with our mistakes... right?
    Why should conutries be any different? We can't possibly elect criminals and at the same time, expect that life will be good for everyone. That is just... impossible! :-P
    5 Dec 2011, 05:30 AM Reply Like
  • Origa
    , contributor
    Comments (564) | Send Message
     
    I Really like your comment, We European say the same about the US politician. You cannot agree on one single issue before you want to put a roadblock in front of you and say.

     

    This roadblock is important, that's why you can't pass!
    5 Dec 2011, 02:53 PM Reply Like
  • edsanville
    , contributor
    Comments (73) | Send Message
     
    "including a ban on cash transactions above €1K euros."

     

    Typical government thinking: people are getting away with tax evasion? Don't enforce existing tax laws, add a new law banning cash transactions! That's what happens when leaders scoff at the word "freedom" as if it was a meaningless word.
    5 Dec 2011, 08:53 AM Reply Like
  • fxmaven
    , contributor
    Comments (1455) | Send Message
     
    This "ban" on cash transaction is like the law banning prostiution in Thailand. Really, there is one.
    5 Dec 2011, 02:00 PM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (11527) | Send Message
     
    In many ways Italy is already almost over the edge. If austerity tips them into economic contraction increasing taxes etc. will not solve it because it will only lead to weaker revenues. In the end they need to cut out their massive government and hack out government employees. That will be necessary and unpopular, a step no one there is really making.
    5 Dec 2011, 03:37 PM Reply Like
  • bob adamson
    , contributor
    Comments (4559) | Send Message
     
    Arguably events up to December 7th have proven Monti to be a match for Berlusconi and for the Northern League as the following articles illustrate.

     

    http://bit.ly/rrIoVv

     

    http://econ.st/u5KFo1
    7 Dec 2011, 12:40 AM Reply Like
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