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Lingering doubts over Italy's austerity plan

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Lingering doubts over Italy's austerity plan


Following approval by Italy’s government of a 25 billion euro austerity plan over the next two years, Euronews spoke with the Editor-in-Chief of the economic daily ‘Italia Oggi,’ Pier Luigi Magnaschi.

Claudio Rosmino: ‘‘Mr Magnaschi, welcome to Euronews. Following the example of other European countries, Italy has unveiled an anti-crisis strategy. Do you think the main elements of this plan can be effective?’‘

Pier Luigi Magnaschi: ‘‘This strategy may be insufficient. Compared to previous corrective public budget plans, it has new elements because it is about saving public money. That can be done either by raising taxes or by reducing public waste. Italy’s economy minister Tremoti has decided to maintain the current tax level. Instead Italy will introduce new ways of battling tax evasion by involving local authorities who will receive 30 per cent of any money that is recouped. The other aim is to simplify public administration.’‘

Euronews: ‘‘When we saw what was happening in Greece, aren’t these measures too late?’‘

Pier Luigi Magnaschi:’‘We are all lagging behind in Europe, including the emergency bailout despite the reluctance of Germany on the eve of regional elections. Everybody thought the crisis would run out of steam itself, but it ended up involving all the members of the eurozone.’‘

Euronews: ‘‘How do you rate the state of the Italian economy compared to Greece, Portugal and Spain?’‘

Pier Luigi Magnaschi: ‘‘What are Italy’s strong points? Why is it more stable than Greece, even if its overall debt is far bigger? This is mainly due to the fact that instead of using public funds to cope with the crisis like other countries have, Italy, thanks to the action of its so called Mr No, Tremonti, has made economies. The public deficit increase this year has been less than in other countries. The other important thing is that in Italy, a large part of public debt is balanced by national savings.’‘

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