La manovra Monti

 I don't agree with those, who are crying against the measures that the Monti Government has decided to combate the budget deficit.  I mostly agree with the big measures and also with the small ones. 

Pension System:  this is the main pont, where bancrutpcy was looming.  Now finally:

- the principle of "pensione contributiva"  against "pensione ditribuitiva" has become universal. The amount of your pension depends on the amount what you paid into the system, not on your last salaries.  This puts inline with all other countries

-  abolishment of the "pensione di anzianità", finally!  How many well paid bankers, employees for Parastate companies like ENEL have gone in pension with 55 years?  I know various of them only among my friends and aquaintances. They are one of he reasons, why another 50% of Italian Pensioners are below 1000 Euros/month.

- The pension age  will be risen gradually until 67. Women and Men will be treated equally.  This it not enough, 70 should be the target, but a good start and some creativity is asked for rising the pension age with introducing part time and similar solutons after the age of 60.

- Now the criticism bites on the freezing of the increases for pensioners caused by inflation. But nearly 40 % all pensions under 960 Euros are exempted from this measure. One could argue that   960 Euro is below the survival limit and the threshold should have been higher. But the fact that the basic 960 Euros will always get the increase because of the loss of inflation has anyway a mitigating effect

 

IVA:  It is not funny to raise IVA by 2 points, in a situation where we need more consumption, and  not less but:

- the problem in Italy ist the public and not the private sector. Families have still reserves, so from a economic point of you it makes sense to rais the sales tax. (there is some criticism that austerity measures are wrong in a time of recession, where you would stimulus. Unfortunately part of this recession is due to lack of trust in Governments, which produced enormous deficits without creating a policy of economic growths...)

- I like IVA by itself, as it is a burden on consum and not on work.  I think that IVA overall in Europe should be gradually rised to 25% with a parallel abasement of income taxes, especially for small and medium incomes. The goal would be to have incomes under 1500 Euro/month completely tax free

 

ICI: finally, the idiotic  measure of the Berlusconi government, to abolish the ICI  (Tax on house property) has been freturned. The ICI is THE tax for communal administrations and the basis of their independence.  Collateral to this a re-evaluation of the real estate has to be done to tax values that are not   artificially low, but comparable to the marke values

 

Small taxes:  on luxury cars, airplanes, boats and capitals  (scudo fiscale).  These are not big numbers, but politically important and the Government could have been also bolder.  I am partying the small increase of tax on petrol, I am only sad that no Government has the balls to double the taxes on petrol to roll back one of the most negative development of modern cities: individual car traffic.

 

 Another criticism against the package is that there is only "austerity", but nothing, what could facilitate growth.  The main factor that inhibit economic activities and growth in Italy are the rigid labor marked, the privileges of professional corporations and the state burocracy  (I think Italy  ranks now worse that 120 in the list of countries regarding the ease of doing busines, But doing changes here will be very, very hard work.

All my best wishes to the Monti government, that they tackle these problems.  I want to be optimistic

 

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