EZA 844 Briefing Note: Italy

13 May 2008

Italy - Reform

New Italian government – labour market reform and fiscal reform key projects of new government


With the new (third) Berlusconi administration sworn in on 08May, market focus is on the strategic objectives of the new government.
The political program based on getting popular support for consensus projects like infrastructure and tax cuts will have to give way to necessary but unpopular reforms.
Most important will be labour market reforms, with a cut in income taxes for overtime work allowing companies to boost productivity.
The other major reform will be implementing fiscal federalism through the transfer of spending powers to the regions, as demanded by the Northern League, which doubled its share of the national vote to 8%.


Asset conclusions: clear election victory by Berlusconi good for political consistency and market-related reforms – positive for stocks and Italian assets in general

© EZA