Monti set to present €24bn budget to avoid bankruptcy


ITALY:NEW ITALIAN prime minister Mario Monti will today in parliament present a €24 billion cost-cutting budget, necessary to save Italy from bankruptcy and the euro from meltdown.

Speaking last night after a tense weekend which saw him outline the details of his budget to political parties, social partners and more than 70 different lobby groups, Mr Monti did little to hide the gravity of the moment, saying in a TV message to Italians: “This government has a short-term mandate with a very severe undertaking, namely to help Italy out of a very serious crisis, an international crisis but also a crisis that reflects the difficulties of the Italian economy and of Italian society.

“Italy runs the risk of being held responsible for undermining both the European economy and the euro zone but this is also a moment when we have the chance to show that Italy is a great country, capable of finding within itself the resources to resolve its own problems, in a European context. Italian national debt is not the fault of Europeans, it is the fault of Italians who did not think enough about the well-being of future generations.”

Calling the government decree containing the budget proposals a “Save Italy” measure, Mr Monti said his government had been greatly concerned both to promote growth and distribute the sacrifices equally.

Calling for an Italian “revival”, the prime minister expressed the hope that soon Italy would no longer be looked on as “a contagious disease by the rest of Europe . . . but rather as point of force”. He said his budget would contain measures relative to tax evasion, to the creation of a more meritocratic society as well as measures that will help women and young people, and to bridge the gap between Italy’s south and the rest of the country.

Reflecting the gravity of the moment, the new welfare minister Elsa Fornero began to cry as she was describing aspects of her complex pension reform that will delay early retirement and freeze index-linked increases. A reintroduced property tax and a new luxury goods tax are also expected to be in the package.

Inevitably, Mr Monti’s budget will not be to the liking of either centre-left forces or of the trade unions. Democratic Party leader Pier Luigi Bersani yesterday called for “a greater measure of equity and awareness” while Raffaele Bonanni, head of the CISL confederated union, said the budget proposals were “worrying” and “headed in the wrong direction”.

Critics point to the fact that the budget package appears to contain neither a “wealth tax” on personal patrimony nor significant (if admittedly symbolic) cuts to the cost of national government. In contrast, local government costs may well be cut by as much €1 billion, says Bari mayor Michele Emiliano who, in a tweet shortly after meeting Mr Monti, said: “With these [cuts] we might as well close down all the town councils.”

Mr Monti will present his budget to both houses of parliament this afternoon so that he can take the ratified measure with him to this week’s vital “euro-saving” EU summit in Brussels on Thursday and Friday.