Today the Government has to reveal its cards. After yesterday afternoon's disappointing meeting with the social partners, from which nothing new has been gained except the usual declarations of intent, this morning the veil will finally fall on the new measures developed by the Executive to obey the orders of the ECB. “Everything is falling apart”, undersecretary Gianni Letta admitted yesterday. And to defend ourselves from speculation it is not enough to recalibrate the measures established a little over a month ago with the financial manoeuvre. It is necessary to find another 20-25 billion to put in cash within the next two years. The objective is to bring forward the balanced budget from 2014 to 2013. The intermediate stages envisage bringing the deficit-GDP ratio down to 3,8% this year and to 1,5-1,7% in 2012. This is the a counterpart requested by Frankfurt, which has been buying our bonds for a few days to throw water on the fire in the spread between Btp and Bund.
It will be Giulio Tremonti who will reveal what new sacrifices the Italians will have to bear. The superminister reports to Montecitorio before the Budget and Constitutional Affairs commissions of the Chamber and Senate. The new interventions will become operational with the decree that the Government will probably approve on 16 August (initially it was planned for 18), in the next Council of Ministers. Waiting for Tremonti, let's now see in the form of a diagram what are the new measures that have been talked about the most in the last few hours:
NEW SQUEEZE ON PENSIONS
This should be the keystone of the new plan, but in order to get a handle on social security the Government will have to overcome the opposition of the three confederal trade unions (yesterday the CGIL threatened a new general strike) and above all of the Carroccio. "As long as the League exists, pensions don't touch each other", thundered Umberto Bossi yesterday from the columns of the padania. Here are the most likely interventions:
– Progressive abolition of old-age pensions, excluding only those with 40 years of contributions. Today you can retire from work at the age of 96 (61 years plus 35 contributions), a figure that will rise by one point each year up to 100 in 2015 (65 years plus 35 contributions). The expected revenue is 3,5 billion.
– Anticipation from 2013 to 2012 of the adjustment to life expectancy of the retirement age, which will rise by three months.
– Raising the retirement age for women in the private sector before 2020 (deadline foreseen in the budget).
ADDITIONAL HEALTHCARE TICKET
It is possible to introduce a new ticket on the first three days of hospitalization.
SOLIDARITY LEVY ON MEDIUM-HIGH INCOME
In the footsteps of the Eurotax with which the Prodi government allowed Italy to join the euro, the idea of an extraordinary levy on income above an unspecified quota between 60 and 100 thousand euros is gaining ground year.
THE UNKNOWN OF THE ASSETS
Nobody wants it, from the PDL to the Lega. "Rather I resign," Berlusconi ruled. Yet the ghost of the property continues to hover between the corridors of the Treasury and the Chamber. Tremonti's technicians have thought of a surcharge on the ICI for second homes that would bring in revenue of 6-7 billion. Another possibility is that of a levy on households' movable and immovable wealth. To avoid this path, considered an electoral suicide, Calderoli has proposed a new tax on services to be collected by the Municipalities.
HARMONIZATION TO 20% OF THE TAX ON FINANCIAL INCOME
The rates of all taxes on any form of financial income are leveled at 20%, with the exception of government bonds (BOTs and BTPs would remain at 12,5%). No more than one billion euros could be obtained from this measure.
PROVINCE CUTS
Much of the thorny game on policy cuts will probably be played on this terrain. A halt is envisaged for all the provinces established but not operational and the abolition of those with fewer than 300 inhabitants.
PRIVATIZATION AND LIBERALIZATION
The decree will almost certainly contain a series of liberalisations, as well as the privatization of various local public services.
