A busy week begins today for the Letta government. In the coming days, the Executive is called upon to give important answers on at least four fronts: spending review, tax wedge, cancellation of the second IMU installment and privatization plan, which - according to what was announced today by the Premier - will be presented by the end of this week. Not only that: the revaluation of Bankitalia's shares is also on the agenda.
SPENDING REVIEW
This afternoon the Interministerial Committee for the spending review meets, chaired by the Prime Minister himself. The guidelines of the plan prepared by the extraordinary commissioner, Carlo Cottarelli, to reduce public spending with selective (no longer linear) cuts will be evaluated and then sent to Parliament. The Government aims to recover around one and a half billion already for 2014, thanks to new measures to be included in an amendment to the Stability law. Overall, the three-year program aims to reduce expenditure net of interest from a minimum of 8 to a maximum of 16 billion.
However, the target could be even higher. "I am confident that [the spending review] will have the courage to define a more incisive therapy on the entire field of public spending as early as 2014", Treasury Minister Fabrizio Saccomanni told Corriere della Sera, specifying that "the The overall operation could aspire to a value between 1 and 2% of GDP, once fully operational over a three-year period”.
TAX WEDGE
Also this afternoon, the Budget Commission in the Senate will start voting on the amendments to the Stability Law, but it is not excluded that the Executive will decide to present new modification proposals during the week. The main issues of the former finance are two: tax wedge and taxation on the house.
On the first front, the Democratic Party proposes to concentrate the tax rebates on annual income up to 35 euros (the current threshold is 55), in order to increase the benefits for the less well-off. The centre-right, on the other hand, would like to use at least two-thirds of the 1,5 billion euro earmarked for cutting the tax wedge - which would be postponed for a year - to reduce the taxation of productivity wages.
SECOND IMU INSTALLMENT
Within a few days, the Imu match should be closed definitively with the cancellation of the second installment on the first house, expiring on 16 December. The provision should be contained in a decree that the Government could approve in a Council of Ministers to be convened tomorrow. St
however, it seems that the exemption will not concern agricultural assets (land and rural houses), on which the tax will continue to be paid, so that the financial coverage required by the decree will drop from 2,4 to approximately two billion. Resources that will largely be guaranteed by the increase in tax advances for banks and insurance companies and by the taxation of capital gains made by institutions with the revaluation of the shares held in Bank of Italy.
“The decree is imminent – confirmed today the Undersecretary for the Economy, Pier Paolo Baretta, on the microphones of Radio 1 -. There is a need to give certainties to taxpayers and municipalities”.
PRIVATIZATIONS
Today, speaking at the summit on Italy organized by the Financial Times, the Premier announced that "this week there will be an important event: we will present the privatization plan discussed to the Ministry of the Economy". Last Friday, responding to the European Commission's criticisms of the stability bill, Saccomanni said that "several billions" are expected from the review of public spending and the privatization programme.
REVALUATION OF BANKITALIA SHARES
The damage caused to bank accounts by the increase in tax advances should be compensated for by the revaluation of the shares of the Bank of Italy, which - according to the calculations that Via Nazionale itself has provided to the Treasury - should reach a figure between 5 and 7 billion, guaranteeing the State revenues of around one billion thanks to taxes on capital gains made by credit institutions.
The provision could be contained in the IMU decree itself and therefore receive the green light by mid-week. To conclude the process, however, there is also a need for an extraordinary meeting in Palazzo Koch to amend the statute of the central bank. But time is running out, because the governor Ignazio Visco will not be able to open the assembly if the decree law on quotas has not been first ratified by Parliament.
