Saturday

22nd Jul 2017

Minister breaks down announcing new Italian austerity

Italy’s new technocrat-led cabinet has approved a fresh emergency austerity package a day earlier than expected.

The government of ex-EU-commissioner Mario Monti outlined the key points of the programme, adopted on Sunday, a day ahead of schedule under pressure from markets.

Thank you for reading EUobserver!

Subscribe now and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

  • The social affairs minister broke down announcing the hike in retirement ages (Photo: YouTube.com)

Full details will be made known on Monday as the plan must still be approved by the full sitting of the Italian parliament.

The package amounts to €20 billion in savings to 2014.

The cornerstone of the cost-cutting measures will be a hike in the retirement age to 62 for women and 66 for men, with women also eventually matching the 66-year rule in six years’ time.

The cabinet member responsible for the pension changes, social affairs minister Elas Fornero, was so overwhelmed by her own announcement that she broke down and could not continue.

“The pension system is a long mechanism between the generations so we need it, and it costs us even psychologically, so we have to ask a…,” said Fornero, wiping away tears.

The government also agreed to measures aimed at clamping down on tax evasion and an increase to taxes on the assets of the rich, although a one-off wealth-tax has been shelved, according to reports.

Monti for his part has offered to forego his own salary as prime minister.

“While taking these steps, at the same time we’ve thought about the need to create the conditions for growth in Italy. So we must strongly control the deficit and debt. We must not be seen as a source of infection in Europe, but once again as a source of strength,” he said in announcing the measures.

Separately on Monday, German Chancellor Angela Merkel and French President Nicolas Sarkozy are to meet in Paris in the hope of agreeing to common proposals for changes to the EU treaties that will deliver what the German leader called last week “fiscal union” in the eurozone.

However, there remain strong differences between the two sides about the future role of national governments. France is in favour of treaty changes, but is loth to permit such infringement of its national sovereignty.

The outline of the Franco-German pact comes ahead of a two-day crunch summit of European leaders at the end of the week.

EU economy chief Olli Rehn has said that the bloc has just days to save the eurozone.

The aim is to embrace stringent new fiscal rules in which budget-making will in effect be taken out of the hands of national parliaments and handed over to the European Commission and the Council of Ministers, with supervision by Brussels backed up by the threat of sanction imposed by European Court of Justice judges.

Such measures it is thought would be a sufficient quid pro quo for the European Central Bank, which would then ramp up its bond purchases of troubled governments.

The new ECB chief, Mario Draghi, last week in an address to a nearly empty European Parliament, hinted that the Frankfurt institution was ready to move with such purchases, but only after a “fiscal compact” had been achieved.

Over the weekend however, the deputy Dutch foreign minister, Ben Knapen, warned against any expectation of a complete resolution to the crisis at the upcoming summit.

"I do not suggest that there is a peak and then a deus ex machina solution. This is a marathon," he told Sunday television programme Buitenhof.

Italian bonds shatter 7% bail-out ceiling

The interest rate on Italian 10-year government bonds breached seven percent on Wednesday, shattering the psychological bail-out ‘ceiling’. Greece, Portugal and Ireland all had to seek multi-billion-euro bail-outs when their 10-year bonds exceeded this threshold.

Opinion

Greece needs a new plan

Two years into its third bailout, Greece needs to combine the necessary fiscal targets with a new vision. This can be done in the context of the ongoing industrial revolution.

Opinion

Ceta and pesticides: A citizens' rights issue

The trade agreement with Canada will begin to apply on 21 September. But there is still a potential conflict on the right to data protection vs. the right to access information.

News in Brief

  1. Polish parliament adopts controversial justice reform
  2. GMO opt-out plan unlikely to go anywhere in 2017
  3. Slovak PM threatens to boycott inferior food
  4. France takes Google's 'right to be forgotten' to EU court
  5. Turkey accuses German companies of supporting terror
  6. Israel's Netanyahu caught calling EU 'crazy'
  7. UK does not collect enough data to expel EU nationals
  8. Polish president threatens to veto justice reform

Stakeholders' Highlights

  1. European Jewish CongressJean-Marie Le Pen Faces Trial for Oven Comments About Jewish Singer
  2. ACCAAnnounces Belt & Road Research at Shanghai Conference
  3. ECPAFood waste in the field can double without crop protection. #WithOrWithout #pesticides
  4. EU2017EEEstonia Allocates €1 Million to Alleviate Migratory Pressure From Libya in Italy
  5. Dialogue PlatformFethullah Gulen's Message on the Anniversary of the Coup Attempt in Turkey
  6. Martens CentreWeeding out Fake News: An Approach to Social Media Regulation
  7. European Jewish CongressEJC Concerned by Normalisation of Antisemitic Tropes in Hungary
  8. Counter BalanceOut for Summer Episode 1: How the EIB Sweeps a Development Fiasco Under the Rug
  9. CESICESI to Participate in Sectoral Social Dialogue Committee on Postal Services
  10. ILGA-EuropeMalta Keeps on Rocking: Marriage Equality on Its Way
  11. European Friends of ArmeniaEuFoA Director and MEPs Comment on the Recent Conflict Escalation in Nagorno-Karabakh
  12. EU2017EEEstonian Presidency Kicks off Youth Programme With Coding Summer School

Latest News

  1. Dutch coalition talks lengthiest in 40 years
  2. Polish parliament steps up showdown with EU
  3. EU urges UK to clarify its Brexit positions
  4. Law expert: direct EU powers have become too complicated
  5. Winter is here for Spitzenkandidat, but he'll survive
  6. Mafia money pollutes the EU economy
  7. Central Europe should be wary of Brexit stopping
  8. Poland's 'July coup' and what it means for the judiciary