Italy Announces Austerity Plan 2.0 As Local Protests Spread, Turn Violent

Tyler Durden's picture

After Berlusconi was scolded by everyone, but most importantly by backstop solvency provider ECB, for his bull in a China shop maneuver of the first, now defunct, Italian Austerity plan, here are the details from the next, soon to be gutted "Austerity", which readers may be forgiven, if they take it with just a grain of salt. According to Bloomberg, the details are as follows:

  • Plan to to include higher retirement age for women from 2014
  • To add 3% tax on income over 500k euros
  • Italy to approve constitutional law for budget balance Sept
  • To increase VAT from 20% to 21%.

Will anyone take this latest attempt to appease the ECB seriously? Of course not.

In the meantime, Italy, as predicted - remember Piazza Navona strikecam and all that, and especially its workers, are not happy as protests proceed to engulf the country:

Protesters in Italy scuffled with police, burned flags and threw eggs and smoke bombs at banks on Tuesday in what they said could be a taste of escalating public disorder as public spending cuts bring pain to families.

 

Prime Minister Silvio Berlusconi is scrambling to enact deep cuts to prevent a Greek-style financial collapse. Protesters said this could lead to unrest like that seen on the streets of other austerity-hit European countries.

 

Tens of thousands of striking workers, students and pensioners joined marches in cities from Palermo to Turin, voicing opposition to the proposed 45.5 billion euro austerity package and discontent with Berlusconi's government.

 

"This is the first step of a crucial autumn, it is the chance our generation has to fight back," said 33-year-old Enrico Sitta at a march in Rome.

 

Protests in Italy have not reached the scale of mass demonstrations in Spain by groups known as the "indignados," or mass rallies at Syntagma Square in Athens that sparked violent clashes. But some in Rome expect popular anger to intensify if pressure on struggling households continues.

 

Italy's biggest union CGIL called Tuesday's strike against the austerity plan presented last month by Berlusconi's government, aimed at balancing the budget by 2013.

 

Many protesters voiced personal reasons for anger.

 

Italian workers, who already earn some of the lowest salaries in western Europe, have seen wages stagnate while consumer prices shoot up and are furious at having to shoulder further burdens in the government's austerity plan.

 

Italy has already introduced delays to retirement and freezes on state salaries as part of previous austerity measures. A plan in the latest package would withhold the retirement funds of public sector employees for two years after leaving their jobs.

 

Industrial worker Claudio Bargilli, 47, called the proposed cuts "a social massacre."

 

"The government is presenting cuts upon cuts, and we can't make it to the end of the month," he said, adding that he and his colleagues were already close to the poverty line, surviving on an income of 1,000 euros a month.    

We give Berlusconi's government at most 3 months. Countdown starts now.