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15 August 2011

WSJ: Italy cuts criticised by unions


After Italy unveiled a long-awaited austerity plan aimed at balancing its budget by 2013, criticism of the government over some parts of the decree has increased among unions, economists and business groups, paving the way for a possible general strike.

Prime Minister, Silvio Berlusconi, and Economy Minister, Giulio Tremonti, late Friday announced €45.5 billion ($64.8 billion) in fiscal cuts and higher taxes aimed at bringing the public deficit down to 1.4 per cent of gross domestic product in 2012 and to a balanced budget in 2013. Unions and economists note that the plan lacks pension overhauls or measures to boost economic growth, and relies heavily on tax increases.

But while European executives supported the Italian austerity plan, it was criticised by representatives of centre-left parties; the head of one of Italy's largest unions, CGIL; and the head of Italian business lobby, Confindustria, who all noted that some measures hit very few Italians and don't support economic growth. CGIL Secretary, Susanna Camusso, said over the weekend that the unions could call a general strike and that a date could be decided after a meeting scheduled for August 23.  According to several reports, Ms Camusso said there was no other way "to oppose the iniquity of this austerity plan".

Ferrari Chairman, Luca Cordero di Montezemolo, criticised the new solidarity tax, saying it would hit the usual taxpayers. Ms Marcegaglia also criticised the "Robin Hood Tax", which is expected to hit energy and wind companies, calling it a "folly." Ms Camusso, Ms Marcegaglia and other observers say they believe the plan will hammer Italy's weak economic growth despite repeated reassurance from Messrs Tremonti and Berlusconi.

Full article



© Wall Street Journal


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