Summarizing The Terms Of Italian Austerity (Or Here Comes The Piazza Navona Strike Cam)
Remember how two months ago Greece came up with a bulletized list of austerity measures it would immediately if not sooner engage in to demonstrate its responsible adult behavior, funded by over €200 billion in European and American taxpayers funds and two bailouts? Well, since then we have learned that Greek GDP has plunged below even the worst case scenarios, even as the country has missed all deficit cut targets. Today, it is Italy's turn, which however apparently was confused and presented the list of austerity before it got a Greek-style rescue. Which is bad. Because within a few weeks we expect the strike (and riot)-cam to be planted firmly in the Piazza Navona and across the streets ot the Trastevere in capturing the latest round of European indignation, oddly enough not caused by local filming of The Jersey Shore. And now that the strawman is out there, when Italy actually needs the money, which will be soon, and is found to be in compliance with precisely zero of its Reps and Warranties (or kinda like a Bank of America RMBS prospectus) it just may make defrauding the middle that much more difficult.
Summary of Italian Austerity
SPENDING CUTS
- Cuts to the budgets of central government ministries, worth a total of 6 billion euros in 2012 and 2.5 bln in 2013.
- Funding to town councils, regions and provinces reduced by 6 bln euros in 2012 and 3.5 bln euros in 2013.
- Unspecified changes to the pension system to save 1 billion euros in 2012.
- A progressive increase in the retirement age of women in the private sector to 65 from 60 to begin in 2016, instead of 2020 as previously planned.
- The retirement funds of public sector employees will be withheld for two years after they leave their jobs.
- A reduction the "cost of politics" resulting in a halving of elected officials and around 55,000 fewer positions in the apparatus of central and local government. However, Berlusconi did not give a timescale for these cuts.
- Abolition of 34 of Italy's 110 provincial governments and the merging of town councils with less than 1,000 inhabitants. However, this measure will be "for the future" and not become effective during the government's current term of office, Berlusconi said.
HIGHER REVENUES
- A "solidarity tax" on high earners, to be levied for two years, as an additional 5 percent on income above 90,000 euros per year and 10 percent on income above 150,000 euros.
- Increase in taxation of income from financial investments to 20 percent from 12.5 percent, excluding income from government bonds.
- Purchases worth more than 2,500 euros will no longer be allowed to be made in cash, as a means of curbing tax evasion. There will also be tougher penalties, such as suspension from professional bodies, for failure to issue receipts and invoices.
- All non-religious public holidays, such as the June 2 anniversary of the founding of the Italian Republic, will be celebrated on a Sunday in a bid to increase the number of working days in a year.
REFORMS
- A liberalisation of national labour contracts giving greater scope to strike accords at the company or local level.
Reuters' take on these latest promises scribbled on a non-binding piece of paper:
Italy's cabinet adopted sweeping austerity measures on Friday to cut the fiscal deficit by 45.5 billion euros and balance the budget in 2013, a year ahead of its previous schedule.
The measures, which were passed by emergency decree, must now be approved by parliament within 60 days. They come less than a month after parliament approved a previous austerity package, aimed at eliminating the deficit in 2014.
Rome promised to re-write and frontload its plans in response to a letter from the European Central Bank, which agreed to buy Italian bonds to arrest a huge market sell-off in exchange for faster fiscal consolidation and economic reform.
Austerity measures will now total 20 billion euros in 2012 and 25.5 billion in 2013, Prime Minister Silvio Berlusconi said at a news conference after the cabinet meeting.
Economy Minister Giulio Tremonti said the budget deficit will fall to 1.4 percent of gross domestic product in 2012 from 3.8 percent this year, and be eliminated in 2013.
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Bunga time
"Buy the fucking Bunga!" - Bitchez.
(Credit to WB7 for that beauty)
This "draconian" Italian deficit reduction plan is not worth a paper it was written on. It is a joke.
It reminds me a street-corner prostitute promising to stay in her business practicing abstinence from sex.
Solidarity tax? Oy....
if you wanted to run people out of your country, that's a good start.
Same thing that's gonna happen to Jefferson County Alabama.
"if you wanted to run people out of your country, that's a good start."
Where are these rich Italians going to go to? Greece? And are they going to be able to get as high paying a job there with massive unemployment around the EU? And will they really leave behind all their family and friends and networks simply because they have to pay an extra $5000 in taxes a year on their $200,000 income?
If that's as much loyalty as they have to a country, then actually yeah both sides would be better off if they did leave.
Don't be held hostage with idle threats from the rich. Wherever they threaten to move to is quite possibly going to be the site of the next bankster attack anyway. So what are they going to do? Move again?
Who is John Galt?
A ridiculous cult follower who has been proven wrong yet refuses to admit it because cult members tend to be true believers regardless of the facts. See your anticipated response.
Ayn Rand's fictitious hero ... and guess who worshipped Ayn Rand? Well Alan Greenspan and Milton Freidman ... the 'intellectual' proponents of where we are today.
You know, this reminds me of the big sports team owners who regularly hold US cities hostage in order for them to build them (or subsidize) new construction. It's mostly worked, up until now...
Pay Day Today ,
You are so right. These rich Italians will eventually end up in China working for a bowl of rice.
If your tax rate goes up by 10% and you get a pay raise of 12%, what's the net effect?
The whole reason people in this tax class are able to command the wages they do is because they have the pricing power to demand them.
Most quickly recover if not immediately.
It is those without pricing power that must ultimately bear the brunt of any increase, no matter who, what or where these increases originate from.
The good thing is that pricing power, by it's very nature, results from a scarcity, so the burden of the few is passed down to the many and the net effect is very dilutive.
Trickle down works.
The fact is that the solidariety tax is newspeak for tax increase. The top personal income rate becomes 57 %. However, dear Tyler, let me bet you, we won't see a revolution in Italy, unless there is world war. You may even see some demonstrations in piazza Navona but not a revolution. That's not typical Italian. Italian successful civil commotions happen only at times of international wars. The only exception in centuries, from the fall of the Roman Empire in 476 AD, has been the Fascist Revolution in 1922 (but also that was connected, somehow, to the Russian Bolschevik Revolution, an international major event).
So you'll see a serious revolution in Italy only if Israel attacks Iran. At that point you may trun out to have had a correct forecast.
if you wanted to run people out of your country, that's a good start.
I've read before that higher taxes do not tend to make richer people move.
It seems logical to me that they wouldn't want to move every time the taxes changed somewhere.
Also the fact that jurisdictions with increasingly low tax rates tend to be increasingly unstable, dangerous or autocratic places to live.
Interesting correlation, that.
Unlike Chicago...
I predict tax revenues DROp if these measures are adopted. But bureaucrats and politicians never learn.
"Solidarity tax" = "Solidaritaetssteuer" (a fossil from German post-1989 re-unification which never ends in its parasitic eating away at all positive income). Nice. Did they send someone from the German Finanzbehoerde to draft this damnation to Hell? The Germanization of the fun-loving Mediterranean cultures has come. They will never look the same. Europe has killed off its sun-drenched utopias. Everything turn to grey.
Grey? Why, Audi's look good in black as well.
Take a look at the proposed tax rates for capital gains. They look very German too. Socialists of Europe seem to unite. The question is if Switzerland will close the borders before or after the EUSSR will build a wall around Switzerland!
This is 14.300.000.000.000 times better than the US budget compromise... At least they are trying to do something.
YOU just hate it that the usa has the financial world's confidence and Europe as a whole doesn't. We are the only country whose bonds go up on a downgrade.
If you really want to run the next world currency you must get rid of spain portugal ireland italy and greece in the ECU.
/whoopie/
$1746 per ounce of that "confidence" and ripping!
/sarc/
/bark/
/in the dark/
YOU might have recognized that i´m from Switzerland.
really? do u have a cow? we use to have cows where i grew up. i miss those cows.
"the usa has the financial world's confidence" hahahahahahahahahahahahahahahahahahaha
lololol. You gotta admit, though, "confidence" is what we do. It's pretty much all we do, but still.
In reality, though, I see it as folks just trying to hide in the ponzi that will be last to fall. Some confidence that is. And what an achievement!
"YOU just hate it that the usa has the financial world's confidence and Europe as a whole doesn't. We are the only country whose bonds go up on a downgrade.
If you really want to run the next world currency you must get rid of spain portugal ireland italy and greece in the ECU."
Muahahahahahaha! No: all it's needed is a powerful fleet and a owning the largest arsenal of WMD in the world, then you can go around telling everyone "try to drop the dollar, if you can" (remember Jack Palance "Pick up that gun" ?)
Good luck with this austerity measure (they have been trying to do this for decades without success):
This is about control, not austerity.
This is 14.300.000.000.000 times better than the US budget compromise... At least they are trying to do something.
I can't help but notice they are only raising the retirement age to younger than we have it at. We waste too much damn money on corporate welfare and imperialism.
As Yoda said, "there is no try, only do."
Basta! Si si, we have too much debt. So does everyone! Japan is worse than we are. So, come on down Senori Allemani and Mangia.
Eat it up! We aren't gonna get debt free.
10% over 150,000
Dang that will case chaos
Not if you accept a pay cut to 149.999. There, fixed it.
Let's be real, someone on $160,000 will have to pay an extra $1000 tax. No big deal, seriously.
Exactly. That is one heck of a return on a single Euro!
actually, 16000€ extra and that comes above the tax they already pay.
The real question should come from billionaires who make 1000€ a month officially!
"actually, 16000€ extra"
If you read the statement it says that it applies to income over €150,000. In the example I used above only €10,000 worth of income is affected as that is how much rests above the threshold.
"Solidarity tax", lol.
...meanwhile tutto tranquillo (at least at the Pope's Residence)
http://www.atlantestarhotel.com/webcam.htm
I would have offered the mafia to launder all of its money without criminal prosecution for a 5% fee. Hell that would have brought some revenues.
"I would have offered the mafia and multinational corporations to launder all of its money without criminal prosecution for a 5% fee."
Just an idea.
That would be 50 % of AMERICAN GDP...
You might be underestimating that a bit.
Done already two years ago: it was called "the fiscal shield"... People having money abroad were allowed to bring it back with a mere 2% fee and a "tombal deal" with the state not asking anything about where the money comes from and renouncing on any further taxationo or prosecution for fiscal fraud. In fact Tremonti did some real unfair competition to mafia in money laundry...
Now this is the durden that we all love and be "we all" I really mean me.
Bring back the junk button, please!
This place was great when we had the great flame wars and anything by GW about israel brought out the internet warriors in full glory.
We need the junk button....but some people didnt like controversy and wanted complete conformity...so junk went to ratings went to nothing at all now....so boring.
BRING BACK THE JUNK BUTTON. LET ZERO HEDGE BE REBORN AGAIN!
TCT, you get released from jail early? Heard the black SUVs got ya....
*Junked*
L0L! who could have seen that coming?
hey t_c_t! either way is ok w/ me. i'm not sure if there are issus with the site staying up better w/out it, tho, in which case, i woiuld say better not, now.
No junk should take a load off the database servers....each junk causes an update. I was worried about that when up/down appeared. This boxed comments appeared to have exhausted bandwidth too.
The thing I miss is easily tracking one's posts. Bookmarking works (most of the time) like before.
Personally, I think the addition of a topical threaded forum would be cool.
why don't you go to another site where you you won't hafta be sidetracked by morons like me, then, and the other "trolls" with whom i went OT, you fuking little asswipe!
"The thing I miss is easily tracking one's posts." - JohnG
From the Zerohedge page, go to 'My Account", then select "tracking"
OR
go to:
http://www.zerohedge.com/users/JohnG/track
Thx!
Actually, just clicking on the name with the ZH comment will also work!
I'd just take the ability to write articles for the scrum myself. We down here are the difference of course.
Yes, I want the JUNK BUTTON back as well. And make all junks have a painful consequence. Say: For every junk, the junked one has to donate one share of GS to zero hedge.
You're going to get more than a few ups for your avatar.
see her gold chain--I bought it for her. She will be mine for a long time.
I miss the up / green, down / red buttons. It is pretty boring in the comments section without them. Also, I wish ZH had a spellchecker. WTF happened when Tyler did this sites ' upgrade' ?? Enuf bitchin, Tyler has been absolutely slamming us with an unbelievable number of articles over the last few weeks, it has been hard to keep up. Heck, even after being on here over a year I still feel like I am on a steep learning curve .
rally? (really: San Bernadino vocalization)
I am just for sure that those Eye-talians are so not interested in a Greek-style rescue.
(it rally sucks to have to splain wordplay, but guess I gotta).
flame this.......
(go to 4:30)
http://www.youtube.com/watch?v=RP4FjODPDFA
Yes, but will "Tumolto Cane" make an appearance??
Can't buy two ounces of Gold with cash ?
No, but you can buy one ounce of gold and 19 ounces of silver!
I like this plan - bold and quick way to balance the budget. It has cut, tax, and balance components. Not in ten years - but in two years. Forza Italia!
Can we outsource our Congress and White House to Italy? Italians seem to know how to do it, and they have the balls.
We are Italy take a look! Italy has learned and become "the USA of 50 years ago." At least they're trying to.
they have 60 days to pass it. since tyler included the part about a plan being passed last month, we shall see if this, which is probably a response to the banking crisis, also, will fly.
after pm berlusconi announced that his finimini tremonti was resigning, with rumors galore about what was gonna go down & why, followed by the finimini "correcting" the pm, when he wasn't indicted for anything (i think) i'll bet there was some hand-waving & world-class gesturing in those cabinet chambers getting this plan ready to publish!
what they have done is ban short sales, for 1 day now, which seems to have "calmed the markets" but as tyler has been careful to point out, that sword can cut both ways. markets, rates, and prices are being "managed" like never before by the very same geniuses whose economics brought them to the edge of the sheer cliff. same as here, pretty much, it seems to me, Fin_C, the main diff being they have the EU & the euro, with less "control" via their goobermint & banksters than the US with the world reserve currency. so they hafta be a little more presentable at these auditions, since they are bull-shitting many more interests to get their financial applause.
here in the US, for example, we see lower commodity prices, in general, and more reasonably-priced stock than a short while ago. so, it isn't that some things can't or won't look better, here and there, at times. but we can't generate enuf economic activity to run the country and pay the nut. and the nut keeps getting bigger!
neither can italy, france, greece, great britain, spain, portugal, and so on. libya prob had one of the strongest economies and fastest-rising standard of living on the planet over the last 20 years, but that has been "fixed" now, too. permanently, perhaps. if any of these clown shows suddenly "knows how to do it"..., well,...
...we shall see...
Are only women being hit on the retirement age section because the men don't work?
at least the amount of hookers alloted per politician wasn't cut!
you got to keep the stimulus and job creation package going!
ZH did you not know all it well with financials.... they soared today, so things must be absolutely perfect
Wow, fuck the people over with 'reforms', taxes, and spending cuts, for a load of bad debt that can't be repaid. Who bent over for the banksters? Italy claims it will. Hopefully they renege, afterall, why should they do anything on that list? There's not one good real reason why they should do any of that. Not ONE!
Now who is the only one in the equation not taking a hit, the one who should take the sole hit!
It's funny people say 'at least they are trying something'. Yeah and if someone cut off their balls they'll be curing cancer. Because, they'll be 'trying something'...perhaps it'll work. Perhaps if I put a straw up my nose, I'll discover the meaning of life! If not, at least I 'tried'.
No, the only way to get rid of either fraudulent and/or unpayable debt is to cancel it via Glass-Steagall or bankruptcy type reorganization (i.e. haircuts) on the debt. That's it. Everything else in the ponzi system won't work.
It's really funny people still don't understand jack shit about the problem. It isn't spending, it isn't taxing, and no printing won't solve it neither. It's the debt. Everyone with a brain realizes over the past few decades it went way over the payable line, and now only idiots think any of their dogma political side's plan will work.
Meanwhile, the only one that never takes a hit, is the one holding onto the paper (what's the difference between hating paper fiat and paper debt?), and people hold onto the belief that 'debt' is as good as 'gold'.
Glass-Steagall worldwide
Don't listen to the apologists...the cutters, the printers, the taxers that want to terrorize the people (like OBL in many ways) all to suck the cock of the debt holders. Go pucker up for wall street banksters. Because anyone that wants to pay off fraud and/or massive amounts of unpayble debt is in no way against the banksters, they are actually WITH them.
So when you look at that sad fact....who loves the banksters and are with them?
The republican party loves banksters and follows their cue.
The democrat party loves banksters and follows their cue.
The tea party loves banksters and follows their cue.
Printing, cutting, taxing won't get us anywhere. It's the debt, and the mechanism that created it, that have to be destroyed.
Destroy it with Glass-Steagall
Otherwise in reality, you aren't 'trying something', you're just jerking off and saying you are 'doing something'. Yeah you're doing something, you're playing with yourself, you're not actually solving anything.
'Reform', it's the new give away your rights word twister.
So if Germany is supposed to pay all these euro debts (along with france...until france can't), what should they do? Cancel it, via their own Glass-Steagall. They aren't obligated to pay the banksters one dime for their frauds perpetrated on OTHER countries.
It's all good if Germany crosses a 100 percent debt to -fraudulent measure GDP figure, because then they can force their own austerity. Right?
Everyone is being swindled for banksters, and many still want to walk hand and hand with Bernanke. But they say they hate bernanke, yet they help him out by legitimizing the debts. Talk about being schizo.
Glass-Steagall or we're all fucked, because of bullshit being legitimized, and pushed by all the dogma of the political parties. Dems, Repubs, tea, and all the idiots parties in other countries, all toeing the bankster line.
"It's really funny people still don't understand jack shit about the problem. It isn't spending, it isn't taxing, and no printing won't solve it neither."
Don't agree. It IS all about spending. Spending is consumption, and, unless one just fell off the turnip truck, consumption has been The game (and why we're so compelled to protect against discussing it being the root problem).
Do people really believe that all of a sudden TPTB decided that they just all wanted to rise up and fuck with the plebes? Think that they think that they could control the outcome of such? I don't. Further, I believe that this is all occurring because our current consumption levels cannot be maintained, let alone increased. If there was plenty to go around then there's no need to stir this all up: ALL wars and disturbances have at their core battles over resources. This is FUNDAMENTAL shit, this is what happens to all things demonstrating perpetual growth in a petri dish!
TPTB have only two methods for going forward (well, three*, but voluntary suicide by themselves isn't really on the radar):
1) Grab more control and by time by locking people down;
2) Tell everyone the truth, that we just cannot continue to go forward consuming like we do because the planet won't meet our demands- this, of course, would be perceived by the masses as being some conspiracy, in which case the truth would fail (and be nicely filled up by the empty hole of dis-logic, in a fashion like abiotic oil serves).
* Power doesn't cede itself voluntarily. It's merely a possible path, but not probable.
Both of you are damn right.
1) The debt is unsustainable and cannot be paid back. The debt holders are the ones who must be hurt. Glass Steagall all the way to the moon.
We recognise though that this unsustainable debt was built by unsustainable consumption, and consumer expectations which income did not keep up with. Therefore
2) Consumption and consumerism must be smashed. Simpler stuff, built tough and made to last forever. All the other crap gets EOL'd.
This is a pincer movement fight back, and it's got to hapen from a community level, like we have seen in Greece, like we will see in Italy and Germany.
The global economy was/is hugely energy dependent and had/as to recede eventually. The natural state of this reversal/unwind is with people contracting back into regional trade. Doesn't matter what Italy or Greece, or anyone else for that matter, wants, it's what WILL be. Better to embrace this REAL probability than fight it: don't let TPTB claim this future (by dickering about conspiracies and Al Gore [sorry Mr. Party Pussy, I had to get that poke in! :-) ]).
Oh, I'm sure that folks will take advantage of it, some taking the opposite side because they believe that there's some conspiracy going on (well, yes, Mother Nature is conspiring against the status quo, but good luck fighting this battle!). TPTB will look to do what they always do, claim that they are steering us to safety, all the while not actually doing anything and living off those that do do.
Meanwhile, back in the USA: http://i.imgur.com/TV3mR.png
Jesus, that was actually shocking to me. Was that english?
A hypersonic test plane, a so-called scramjet, of the U.S. Airforce, has disintegrated during flight, for the second time.
Nonetheless they want to try it a third time.
Strange, I thought America is bankrupt ?
But you have time and money for these kinds of technological gimmicks ?
That clearly shows where the priorities lie with the U.S. administration.
There is always money for wars, that's for sure.
The U.S. cannot compete via fair competition.
It can only rob and steal the wealth of other nations through war, be it a military war, be it a financial war.
A parasite par excellence.
No wonder that everybody hates that stars-and-stripes loser nation.
What a joke.
Bwaney Fwank needs a faster escape route.
**Junked**
Helicopters are a thing of the past.
@ franken_furter: dude, if i were in germany right now, the last thing on my mind would be the US.
you, sir, germany, are either gonna get cleaned out, or destroy the EU to protect yourself. i could give you the morning line or which it is gonna be, but that might force you to get your head outa yer ass and look around, and you'd probably then have the thought: why do my ears feel so cold?
maybe we (the US) will bail out europe . again. then we can own yer styooopid asses for another 70 years, like the freaking babylonian captivity with a double-down bet on the triple-lindy! you decide, ok, frank? you and angela and whatever banksters pull both of yer "invisible" strings. we'll just keep being self-righteous about our god-given ability to blow things up. on land, sea, and in the air! [L0L]
You simply don't understand Americans, if it was a choice between prosperity or watching a video of high tech weapons killing people, Americans will as a rule pick the video. We love killing, what can I say? And for those who would dispute that, go turn on your TV or watch a movie and watch the "hero".
It's up to the world to stop enabling us and buying our shit paper. Granted the oligarchs ran a clever scheme holding onto a lot of the worlds gold at the Fed, including Germany's gold. So no one gets out of this knife fight pain free. If it makes you feel any better America will be a rotted out husk in a decade. Turns out the oligarchs really don't care for us either, we are just a really convenient mob of morons eager to do their bidding.
But, but... "prosperity" has come from either wielding high-tech weapons, or making movies of them! <[mostly]/sarc>
NOTE: prospertiy is usually only alloted to the few, and only during continuous periods of "growth" (which has been on-going for a long time now, since we discovered how to exploit fossil fuels).
i make that 13bn on a deficit of 100bn - ie f,.all.
as if anyone expected anything else.
extend and pretend - you know the score.
as for jmc 888
no people dont hate usa. maybe they dont respect it but they dont hate it.
the poor still look up to it for what it stands for - a dream - but hey thats better than f.all which is what most of them have right now.
i speak as a brit living in switz. i travel a lot and take the trouble to see the real world. Livorno not Milano, Sierre not Geneve, Lubeck not Berlin, Aarhuus not Kobenhavn.
in the states - I warn you that you have got fat and lazy. Technologically Europe is ahead of USA by more than you think. You are still the big boys but the writing is on the wall. China is chasing up behind and Germany is already ahead
i dont mean this hatefully or negatively - its just a view. good luck to you and God bless america. Defender of the free - unlike Germany (or China)
but this current mess is a product of socialism. not banksters - although they have been complicit and certainly the facilitator. its the govts; and sadly the poor pay, as ever.
the poor will have to learn the lesson again.
and again
and again
meanwhile i shall get back to the gin which is warming up on the aft deck....
Buy French banks!
Sell the Euro!
Croydon Freeholds for a quid!
Allah Akbar!
Mines a pint!
"Technologically Europe is ahead of USA by more than you think."
And, what's that mean? To me, a US citizen, it means squat. The reason being is that I am looking to the future, and the future isn't "techonology," sorry... See http://dieoff.org/page125.htm Figure 1. The Olduvai Theory of Industrial Civilization
Claims of exceptionalism is a sure way to find oneself staring the counter forces of hubris square in the eye. If you're so keen on understanding that the US isn't #1 then I'd figure you'd be able to recognize why (read the previous sentence).
I bet you've got a stash of tinned beans and some cans of gas buried under your lawn! Good luck!
And I couldn't care less who is number one!
More beer!