Oli Rehn, the EU commissioner of Economic and Monetary affairs, has warned Italy not to surpass the deficit/GDP of 3% lid. Few days ago the italian finance minister Saccomanni gave assurance to Mr Rehn on public finance’s stability after the Italian government abolished the tax on house property.
After the gathering Mr. Rehn was not convinced by the solution proposeed by the Italian finance minister and after the umpteenth hearing of political instability in Italy, the commissioner frankly expressed his view asking the Italian government to undertake the necessary reforms to strengthen economic growth and requiring a detailed description of the new tax enacted, the “service tax”.
It is an interesting moment in Europe because technically speaking the recession is over because of Germany and France’s growth, beyond any optimistic forecast. UK is doing well either. However, this good news does not cancel the difficulties of Portugal, Italy, Greece and Spain. Italy in this scenario is still in a dark and uncertain position. In the Southern country there are few signs to affirm the recession is over, but the crisis is ongoing. Unemployment is still high, and thousands of small businesses are closing everyday. Meanwhile, yesterday Berlusconi broadcasted a video, where he complained about his recent sentence for tax fraud and publicly declared his innocence. Yesterday’s message conveyed great uncertainty as well concerning the future of the Italian government, which is supported by the ‘Berlusconi’s centre-right coalition’ with 5 Ministers from his side.
Brussels feels nervous regarding the awkward policy-making of the Italian politicians and although the country was brought back again into the list of virtuous countries in respect of fiscal discipline, the commissioner made it clear that he does not exclude any infringement procedures from the EU Commission, if Italy keeps following this foggy path.