This morning all the newspapers discovered the hot water and that is that there is no money to cancel the IMU and to avoid the VAT increase. So all the promises made by politicians during the electoral campaign proved to be pure illusions: Berlusconi had promised to remove the IMU on first homes and even return the one paid last year, the Democratic Party had said it would be wise to avoid the increase 'VAT (in full harmony with the PDL) and found more money for youth work or to accommodate the many temporary workers in the PA. Now Saccomanni has frozen everyone: there is no money - he said - and above all I don't know where to go to find it .
After two months of gossip, the Letta government collided with reality. Not only that, but he had to undergo a severe warning from the ECB not to breach the public deficit ceiling, a warning that has become necessary because all international observers are looking with ever increasing perplexity at the Italian political debate, which is all set on the possibility of breaking through any barrier to public spending, while reforms are shelved or, as in the case of institutional ones, launched with such a convoluted procedure as to be hardly credible.
Yet Saccomanni and Letta were probably wrong in not immediately making the political forces face up to their responsibilities, proposing a program of cuts in public spending and the sale of state and local government assets which is certainly disliked by politicians because it focuses on these assets that the exponents of the local and central parties exercise their power. Other than postponing the cuts to the local or provincial defense courts! Nor can we limit ourselves to reducing the salaries of parliamentarians. To find sufficient resources to reduce the tax burden on businesses and on labour, it is necessary to take up the ax, cut unnecessary bureaucracy, eliminate a series of political passages that are even harmful because they actually block any entrepreneurial activity.
Of course, Brunetta's scattered declarations together with Fassina's anti-European ones are in the long run damaging Italy's credibility on the markets and with the Brussels authorities. And credibility and consequent trust are intangible assets which however have important concrete implications on the cost and availability of credit for the State and for businesses. If we add to these declarations what is now considered the government's "sleep" as the Financial Times said, the damage worsens and we risk repeating what happened in 2011, when Berlusconi's attack on the Tremonti's (partial) austerity helped to mount the wave of distrust which then overwhelmed the entire government in November.
For Saccomanni and Letta it is time to show courage: they must challenge the parties by questioning their power bases by privatizing everything that can be sold and proposing incisive cuts in all sectors of public spending starting with the most clientelistic ones. There's no way to get by. Greece shuts down public TV. We remove the license fee from Rai and so every Italian will be able to save over 100 Euros (and let's see if Berlusconi agrees). Let's prune off the too many tax breaks granted to lobbies without any merit, let's eliminate public contributions to companies, forbid the Regions to pay useless contributions to too many country fairs. In this way, not only will we be able to find the resources to reduce the tax burden, but we will probably be able to recover the credibility we need to keep international funding channels open.
