Sunday, December 4, 2011
Ready for the Italian riots?
Italy will be next on the poop meet fan meter. In researching some data about the countries debt problem I find that they are just shy of the $2 trillion mark. And for a country that size it will be almost impossible to pull itself up by its' boot straps. So many things are going against it it's hard to begin to explain. They had great growth for many years but in the last two decades were saddled with a slow down in GDP to 1.6% having enjoyed 5 and 6% prior to that. And once again they have followed the Greek lead of corruption, tax evasion and several other factors leading to the current situation. Italy must import nearly all of its' gas and oil with a level of about 92%. To add insult to injury the citizens of the country have had a bit of a run on their banks removing some 2 billion dollars to the run up to this crisis. Ah but the best is yet to come in this tragedy. (No I won't call it a Greek tragedy they have their own problems)
What's their answer or should I say what is the newly elected governments' solution?
The package, dubbed a "Save Italy" decree by Monti, aims to raise more than 10 billion euros from a new property tax, impose a new tax on luxury items like yachts, raise value added tax, crack down on tax evasion and bring forward measures to increase the pension age.
(editors note: Like Greece the wealthy can easily hide their euros in numbered Swiss accounts or other local european stashes. And I'd bet that there are numerous offshore companies not paying their fair share of taxes.)
The package is divided into 20 billion euros of budget tightening and an additional 10 billion euros that will be pumped back into the economy in the form of measures to help companies and boost growth. (Hum have I heard this before?)
At least they are willing to spread a bit of the misery on the well to do but the bulk still falls on the lesser of the population. The unions are not happy with the preposed package and have said as much. And let me add that nothing spurs an economy like good old austerity measures. Yep that will make the little folks go out and spend their money. Oh that's right they won't have much left when the government cleans out their wallets. So never mind. I wonder if the Mafia is jealous?