Italian Austerity Details Appear As Monti Steps Up

Tyler Durden's picture

Noting that the Italian political parties are aware of their responsibilities, new Italian PM Monti expects to complete his initial consultations tomorrow as Bloomberg reports having received a copy of a letter to the European Commission. Bloomberg notes that the letter expects 300,000 public sector job cuts, raising the retirement age quicker than other nations and a tax system overhaul. All credible moves, but we wonder just how this will jibe with the increasingly recession-prone deleveraging that seems likely to occur next quarter at the latest. It brings the ball squarely back into the ECB's hands as monetary saviors while the slow process of fiscal correction occurs - and as we have noted, we believe that another risk-off cluster is likely before the ECB will retract its words.

Bloomberg: Italy Letter to EU Pledges Public-Sector Job Cuts, Tax Overhaul


Italy plans to cut public-sector jobs, overhaul the tax system and introduce incentives for venture-capital investments, the Finance Ministry said in a letter to the European Commission.


Italy plans to raise its retirement age faster than other European Union countries and to cut 300,000 public-sector jobs by 2014, according to the letter, a copy of which was obtained by Bloomberg News.


The nation will also reduce income-tax brackets from five to three of 20 percent, 30 percent and 40 percent, according to the letter, which provided clarifications sought by the commission to a document delivered to the EU by former Prime Minister Silvio Berlusconi last month.


Italy will provide incentives to venture-capital investments in small- and medium-sized companies, while a reintroducton of a property tax called ICI could bring in an additional 3.5 billion euros in revenue, according to the letter.


Berlusconi resigned on Nov. 12, leaving the fate of Italy’s pledges to the EU unclear.

Here is the full statement to the EC:


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slaughterer's picture

My fellow Zhers, please do not place your shorts on today.  Tomorrow EZ Q3 will easily beat (see: "The Last Hurrah") and you have Fed President Evans on CNBS.    That is a pretty lethal combo for bears, IMO. 

knukles's picture

Am I the only one wondering about the timing of all this?  Silvio blows out, Mario takes the helm and Voil-fucking-a this very nice letter appears, as if Silvio had already laid it out ever so nice and neat. 
So why'd he leave?
Work was done.
Solutions taken care of....
Or, Mario and crew produced this clap and it weren't done overnight so for how long had all of this been pre-arranged behind the scenes?

Just like all the exercises and drills that take place contemporaneous with the humongous "incidents" about the globe....

My ass it's another coincidence.

redpill's picture

There's an Italian term for "cut 300,000 public-sector jobs by 2014"






vote_libertarian_party's picture

These guys don't know nuttin'.


Deficit spending equal to 10% of your GDP = growth and recovery forever!!!

ziggy59's picture

Should be the Global Anthem...Bon Jovi.. Living on a Prayer..

JLee2027's picture

All by "2014".

So far away it won't matter anymore.

knukles's picture


This "by 2014" or wheneverthefuck cited is the new use by expiration date gimmick to make it look like there's progress but simply another way of kicking the can down the road all over again, one more time, the sequel, part 2, the beginning.

Global Hunter's picture

300,000 jobs and raise the retirmement age?  That should be easy to pass through, the Italians will be happy about that, rally on.

Texas Ginslinger's picture

Will be interesting to see how the Italian unions respond to the proposed asuterity cuts.

The rail union frequently organizes a strike on Friday and the following Monday to get a 4 day weekend off.

They may just vote on a very long weekend off to flex their no-cuts-to-our-jobs muscle, which will pain the tourist industry.

valley chick's picture

Give them a reason to experience in Italy seemed like somebody was always on strike.  Food was good though. :)

Eireann go Brach's picture

Cue up the riot cams for Rome, venice, Milan etc

knukles's picture

Venice's First Annual Saint Havoc's Feast and Parade of the Riot Gondolas.

kaiserhoff's picture

Venice was supposedly founded by people running into the swamp to escape Attila the Hun.  The rhyme and rhythm of history.

slaughterer's picture

Three card (Mario) Monti:

Card One: Raise taxes

Card Two: Raise Retirement Age.

Card Three:  Cut Public Sector Jobs

Standard Eurocrat GS-alum playbook.   If the ECB prints Italy a little less than a trillion, Monti might just avoid having to shut down the State.  Just got to make Weidmann an offer he cannot refuse.   

slewie the pi-rat's picture

we have reached the point in the farce where the squid is trying to get entire nations to act responsibly...

...and everybody knows it's a trap!

PontifexMaximus's picture

I told you before, it can't be fixed. A technocrate government does not work in Italy. The political casta want their positions, they will not give up, never, because they personally loose too much. So they'll fight til the end. So for supermario, no way out. And again, the markets will teach those dumb asses bersani, casini, fini et al the lesson. Il paese e marcio fino al midollo, cari miei!

crawldaddy's picture

Its worked so well for the Greeks, what possible could go wrong  :P



Bam_Man's picture

300,000 public sector job cuts.

In a country whose President (Napolitano) is an ex-Marxist and former Federal Secretary of the Italian Communist Party.

This ought to be interesting.


azzhatter's picture

Sometimes it just boils down to simple math

DaveyJones's picture

more than sometimes. It's timing not odds when the numbers are hit.

FreudianSlip's picture

Just cut every budget the same percentage.......that's easy and the most equitable.  Forget all special interest groups.


Unfortunately everyone wants their neighbors to cut back while they continue the same benefits.  Well, get over it.  Less money for you, less money for you, less money for all of you.

FreudianSlip's picture

This entire financial meltdown on the planet is to do one thing...

     get tighter control of the masses worldwide.

Pancho Villa's picture

Italy prepares for "The Full Monti".

Italian bond vigilantes prepare for a lynching.

oldman's picture

These 'ex-GS'rs know how to bring on revolution in a manner equal only to their brothers at the IMF! They are brilliant at this----it is no wonder that everything is examined so closely today by so many for signs of 'conspiracy'.

When the gene pool shrinks to such a low level of diversity and number of individuals--------------------------------

Well, we all understand this except 'THEM' 

and most of us can fill in the blank above with whatever and it will still be a secret   no one is listening to the 99%

may be time for more action                 om

JR's picture

It’s the people who created the mess, who have stolen the people’s wealth, who are in there now directing how it should be fixed. Their solution is that the victims must pay.

Monti’s Plan is the Rubin Plan for all Americans all over again.

As the U.S. travels through its economic crisis, it is the victims who are asked to pay in inflation-damaged social security, in extended retirement age, in severe loss of savings, in unemployment, in small business failures and all the rest. In the meantime, the bailouts and the multibillion dollar bonuses and the emergency spending go to the creators of the crisis (the victors) and their politically-connected groups.

As the Roosevelt Institute has charged: “Washington bipartisan elites have been working to weaken Social Security since the mid-Clinton Administration. Clinton, prodded by his Treasury Secretary Robert Rubin, was on the verge of cutting a deal with Newt Gingrich to partially privatize America’s most successful retirement program.

“The intermediary was Clinton’s White House chief of staff Erskine Bowles. The same Bowles is now the co-chair of Obama’s fiscal commission — which also has designs on Social Security. Corporate Democrats keep turning up, like bad pennies....

“But what is it with Democrats like Bowles, Rubin, and Rubin’s protégé Peter Orszag,*director of the Office of Management and Budget and another of the deficit hawks who would weaken Social Security in order to cut the deficit? ...  Don’t they appreciate that two-thirds of elderly Americans depend on Social Security for at least half their income...

“The main reason is that Wall Street looks at all that money and imagines the fees that could be collected if it were diverted to private accounts. It’s no wonder that Democrats like Robert Rubin (Goldman Sachs and Citigroup) and Republicans like Peter G. Peterson (Blackstone Group) are the mainstays of the bipartisan crowd proclaiming a crisis of Social Security and promoting a cut in benefits, or privatization — both of which would produce more reliance on Wall Street products.

These are the guys who brought us the financial collapse, with its devastating effect on pension savings, 401k’s, home equity, and other private resources on which retirees depend. Now, with no sense of shame, they are going after the one part of the system that was not undermined by the calamity — public Social Security.

*Orszag, who has resigned since this article was written, has since been replaced by Jacob Lew, an old hand, who was director of the OMB during the Clinton administration.

Encroaching Darkness's picture

" Now, with no sense of shame, they are going after the one part of the system that was not undermined by the calamity — public Social Security."

Sorry, SS is broke, and will default within a few decades - advances in medicine destroyed its' actuarial basis. Too few payers, too many takers - it will crater, and pay nothing (unless in FRN funny-money, worthless after the currency collapse).

Wall Street will not get any remaining funds - GS steals from its own clients, so why trust any of them?

Put your retirement money (if any survives Obama's IRS) in gold, silver, oil, foreign real estate and anything else that US cannot reach / tax / steal into oblivion - or go broke yourself.

Doesn't matter now that LBJ started it, sixty years of politicians continued it or Obama can't fix it - its broken. Now, go do something about it - for yourself.

JR's picture

They’re after SS now because they‘re after value, taking from the middle class.  Where do they go when they can’t get that value? They’ll be going for the gold.

Here, in September 1999 is Eddie George, governor of the Bank of England: “We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The U.S. Fed was very active in getting the gold price down. So was the U.K.”


Encroaching Darkness's picture

"They’ll be going for the gold."

There are large parts of the planet, including several not under their control, that will need searching before they can find mine.

"Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The U.S. Fed was very active in getting the gold price down. So was the U.K."

When no one wants dollars, or euros, or fiat of any stripe, just how will they manage that again? I doubt they can, or will; and if they are in fact behind the JPM / big bank price manipulations now ongoing, they may not have much gold actually left in their possession to pull it off again.

SS is still broke; still unsustainable. Don't rely on SS for your retirement, if you want to have one. Don't keep all your assets in the US or any one other nation either; diversification may make the difference between dependency (or annihilation) and survival.


Tao 4 the Show's picture

When you look at the big picture, it is such a lame ploy: drench all these countries in seemingly free money and then use the debt to take away their sovereignty and enslave them.

Even Germany benefited as all the other countries had more money to buy German goods. I refuse to use the PIIGS name any longer. It was probably a psyop to engineer social opinion from the beginning.

The kicker is that, as usual, the money loaned to the Euro countries was likely created out of thin air in the process of making the loans. Now the wavers of the magic wand demand austerity and loss of sovereignty as payment for casting their spells. The investor money (a few percent) that backed the money creation is no doubt long spent for banker salaries and bonuses. Thus, the poor bankers risk "haircuts" and going out of business if they are not paid back in full for their sorcery.

The only question remaining is how long it will be before sanity returns- weeks? Years? Decades? Or centuries (as in Dark Ages)?

Shit Bag's picture

"professor Mario Monti: the only economist with only one scientific citation in his whole life"


ebworthen's picture

So when will the retirement age be death, and standing in line for bread and soup count as "public employment"?

robertocarlos's picture

Are there 300,000 govt workers looking to retire early? Buy them out?

steelrules's picture

Italy can kiss their gold good by now that Goldmans Monti is on the job....

Snakeeyes's picture

Italy: Will a New Prime Minister Make a Difference? No. It Doesn't Matter If Its Super Mario or Monty Hall -- There is Too Much Debt and a 70% Probability of Default

boogey_bank's picture

Open letter to "il Giornale" director (in italian):

Egr. Direttore,
pur non essendo nè iscritto nè elettore del Pdl le scrivo per protestare contro il defenestramento del Cav. avvenuto questa settimana. Abbiamo assistito a un colpo di Stato in piena regola. Tutte le evidenze che possiedo, puntano ad inquadrare il prof. (con la p minuscola) Monti come un uomo di paglia che rappresenta gli interessi della lobby bancaria globale che prima ci ha venduto un prestito (grazie al promotore finanziario prodi (sempre con la p minuscola), a condizioni inizialmente vantaggiose per noi (-16% di interesse)

e poi ci hanno mandato il draghi cattivo e il prof. matto in veste di ufficiali di riscossione.
Ma chi è questa entità maligna? Si chiama Goldman Sachs, ha un nick name che è tutto un programma: Vampire Squid.
Non dovevamo accettare caramelle da uno sconosciuto, tantomeno da un calamaro vampiro, ed adesso siamo nella posizione di quel proprietario di bar che chiede un prestito alla camorra e al quale poi viene imposta l'assunzione di un picciotto da mettere alla cassa con ampi poteri.
Il Cavaliere distratto dalle donne viene cacciato in malo modo, eppure al tavolo di gioco mi sembra che lui abbia la mano migliore. E' vittima di  un complotto e tutto quello che deve fare è esporlo ai 4 venti. Perchè non lo fa? Ha paura di perdere qualcosa? 
Lui ha il futuro davanti, ma deve cambiare, deve diventare un leader nazionalista, euroscettico, no global, deve diventare patrono dell'honest money (che è la moneta non basata sul debito, ormai diventata tossica), può mettere all'economia chi vuole, basta non sia keynesiano, "friedmanite" (altrimenti facciamo la fine del Cile di Pinochet), ricardiano (basta importare spazzatura cinese), ed esprima pensieri di senso altre parole bisognerebbe pescare nel campo della scuola austriaca dell'economia.
E adesso vediamo all'orizzonte, patrimoniale, ici e il sinistro profilo del panfilo Britannia che approccia le nostre coste.
I nostri antenati italici erano migliori di noi. Nel posto dove abito ai bucanieri diedero solo il tempo di posare i piedi a terra, perchè li trucidarono sulla spiaggia senza tanti complimenti nel 1529.
Noi invece ai pirati apriamo la porta e stendiamo il tappeto rosso.
Ha ragione Ferrara quando dice che oggi la guerra si combatte con gli spread! Anzi a voler essere più precisi oggi la guerra si combatte con SigmaX...

Sigma X è come la morte nera che in guerre stellari distruggeva interi pianeti, è una mostruosità, una dark pool, qualcosa che va contro la vita, la libertà, contro gli uomini e nessuno dice niente, mentre invece la consob mette sulla graticola i piccoli trader che shortano le banche decotte.
Sigma X è sempre 6 mesi avanti e il prossimo candidato eccellente alla rovina è Albione

Cosa vogliono fare ora GS e Jpmorgan e gli altri banchieri globali?… questo:

Shifting the risk to the innocent, poggiare il loro fardello sulle nostre spalle.

E’ ingiusto, è ignobile, va impedito, adesso!

E allora il Cav. Dovrebbe fare come il suo amico Putin, che non è il Cristo, ma ciò nondi meno negli anni novanta ha cacciato gli oligarchi dal tempio.

Ma l’Italia non è la Russia, non ha petrolio e miniere. E allora, perché il calamaro vampiro si aggira attorno a noi? …Quando il diavolo ti accarezza vuole l’anima…

L’anima dell’Italia è ubicata nei sotterranei del palazzo di Bankitalia, dove dovrebbero esserci 2500 tonnellate metriche di oro. Oro, non una fetecchia di euro cambiale con scritto pagherò.

A cosa serve l’oro ad una banca? Deve sapere, Direttore, che l’oro per un banchiere centrale (e quindi anche per il vampiro globale, che è azionista dello stesso), è come la kriptonite per Superman.  Il suo peggior nemico e concorrente…Una moneta alternativa che non puoi diluire e stampare a piacimento, un’acqua che disseta sempre e non come la carta moneta chè è come quel vino corretto al bisolfito che fa bene solo all’oste che lo vende.

Mettendo le mani sulle nostre riserve la lobby bancaria avrà un asset nel quale diluire i suoi debiti mostruosi e sempre crescenti e noi avremo una via di fuga in meno…

E allora cosa propongo al Cav.?

Facciamo default, teniamoci l’oro ed alle banche diamo il dito medio. Nella nostra posizione siamo tra i Paesi più solidi del mondo.

Non facciamo come i nativi americani che davano via vere ricchezze per uno specchio.

Ma per fare questo ci vuole coraggio.

Cavaliere, se la sente?


Un saluto e che l’anima di De Gaulle (l’ultimo vero STATISTA europeo) ci protegga.

paulypaul's picture

As Roma so goes italy.

Think there's a saying like that for all economic centres.

Archduke's picture

Aboslutely insane!  Monti aims for retirement age of 70 by 2050 - not 65, 70!

This from an arbitrary diktat without referendum or any public consultation,

by an unelected Trilateralface, Bildeberger, Goldman banker squid.


This is a massive cultural shift.  and the wrong one!  this starves off jobs from the youth.

Let me dare to present the real demographic story behind a lot of the structural weakness

of the PIGS (no I - just latin economies):  traditional gender roles.  Portugal, Italy,

Spain were left behind as europe's other half joined the productive workforce elsewhere.


just look at the following stats:


sure all of europe is getting older, but the latin countries have a double kicker.

what makes the macho latin culture think it can escape this essential demographic

shift that occured everywhere else? (france and germany did it, why can't you?).


in fact I'll wager that more women in the workforce decreases old boy network nepotism,

reduces criminality, and increases competition and innovation  both among men and women.


and tax bleed the bloody church for chr*st's sake.