Berlusconi’s austerity measures under fire

THE European Central Bank, Italy’s main industrial lobby and even the Vatican voiced increasing concern yesterday over Italy’s fudging of its austerity plans, which have been changing daily to placate various interests.

Bank chief Jean-Claude Trichet said in an interview with Il Sole 24 Ore newspaper that the €45.5 billion (£40bn) legislative package of spending cuts and tax increases was of “extreme importance” and urged Italy to carry it through.

The government, which introduced the measures on 5 August, has been changing the proposals amid protests and internal squabbling within prime minister Silvio Berlusconi’s coalition. Already, the government has scrapped a tax on high earners, though it was kept for public officials, and cutbacks for municipal governments.

To make up for the losses, the latest revision announced on Thursday involves, among other things, a fresh crackdown on tax evasion, including the threat of prison for anyone caught evading taxes of more than €3m and online publication of taxpayers’ income.

That proposal sparked heated criticism yesterday from industrial group Confindustria, which said that, while it has long championed cracking down on Italy’s notorious tax dodgers, the government’s amendment was sloppy, “incoherent” and inefficient.

In a statement, Confindustria said it was “greatly concerned by the way in which Italy’s serious public finance situation and economic regrowth are being confronted.”

Even one of the Vatican’s leading cardinals, Tarcisio Bertone highlighted a new victim of the austerity measures, co-operative organisations, which under the latest revision would see their taxes rise. Cardinal Bertone said the “virtuous,” good that co-ops do particularly in crises “merit treatment that is better than what has been given them” in the latest austerity drive.