Italy's cabinet on Friday approved a package of around 300 million euros in industrial incentives, including white goods and scooters but excluding the key car sector. The measures mark a sharp reduction from last year's 1.2 billion euros of incentives, which included a cash for clunkers scheme to encourage people to buy new, less polluting cars.
Car maker Fiat, Italy's largest industrial group, has said it still could post a flat trading profit in 2010 versus last year's 1.1 billion euros, after the removal of the incentives. Economy Minister Giulio Tremonti, speaking at a news conference, admitted that the sums involved in the latest plan - around 0.03 percent of gross domestic product - were "not very big".
He said it would be entirely financed by money recouped from combatting tax evasion and so would not have any impact on public finances. Industry Minister Claudio Scajola said the measures will take effect from April 6 and, by stimulating demand, will help Italy meet the government target of 2010 economic growth of 1.1 percent after the record 5 percent contraction last year.
"The recovery is slow and patchy," he told reporters. Government documents showed the total sum made available amount to 420 million euros, with 120 million in the form of direct support to sectors in difficulty rather than fiscal incentives to consumption. The incentives cover a wide range of product sectors, all benefiting from modest sums of between 8 million and 110 million euros.
These include kitchen and household appliances (110 million euros), energy efficient houses (60 million), construction cranes (40 million), industrial and agricultural machinery (20 million) and high speed Internet for students (20 million).
Tremonti said the government decree had also eased restrictions on home improvements. He said the principle guiding the new norms was that "everything that is not explicitly forbidden is allowed, instead of (the current principle that) everything is forbidden except what is spelled out as permitted."
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