The price that Enrico Letta, the new Italian prime minister, had had to pay for the centre-right group of billionaire businessman Silvio Berlusconi joining the coalition was clear in his speech to parliament.
Support for the reforms needed to get Italy’s moribund economy growing again included the abolition of a major revenue raiser.
The hated housing tax on Italians’ first homes has been frozen, is under review, and is widely expected to be dumped.
Berlusconi had promised to get rid of the tax during his election campaign, even going so far as to promise that he would repay it from his own fortune, which led to complaints that he was trying to bribe voters.
A minimum wage for low income families is being proposed to appease the anti-politician Beppe Grillo’s 5-Star movement. Up until now Italy has had no law governing the minimum wage that is paid, instead that is set through collective bargaining agreements
Growth stimulation is supposed to come from cuts in social security contributions for companies that hire the young and unemployed.
Measures to get more women into the workforce are also promised but the government has a tough task ahead reversing a jobless total that is at 11.6 percent, with more than a third of young Italians out of work.
The cost of the measures has been estimated at eight billion euros and it is not clear how the government is going to raise all that money, particularly as Letta said he will not go ahead with an increase in VAT.
Financial market reacted positively to the end of months of political stalemate.
The Milan stock market index was the region’s best performer, up 2.2 percent. Gainers included banks and Berlusconi’s media company.
Italy’s cost of borrowing also dropped to its lowest since October 2010.
- 1Braking bad: auto industry plagued by scandals
- 2How abolishing taxes saved a dying Hungarian village
- 3Saudi Arabia responds to low oil prices with economic reform plan
- 4VW counts cost of emissions scandal as other German carmakers join massive recall
- 5As iPhone sales slide, what is Apple’s next big money maker?
Wires > Business
- 22:16 CET Apple’s stock suffers worst week since 2013
- 21:50 CET Deutsche Boerse retracts merger comment at UK request
- 20:49 CET VW executive committee balks at Qatar’s push for seat – sources
- 19:06 CET UK first quarter motor insurance premiums slip – AA
- 19:01 CET UK’s Co-operative Bank names Liam Coleman as likely CEO successor
- 18:58 CET Tame U.S. inflation bolsters Fed caution on rate hikes
- 18:47 CET EU watchdog says clearing houses resilient, tougher daily checks…
- 18:39 CET Ratings agency S&P sees UK staying in EU by small majority