Italy's new economy minister Fabrizio Saccomanni plans to cut taxes and public spending and lower borrowing costs, according to an interview published on Sunday in daily la Repubblica. Saccomanni, formerly deputy governor of Italy's central bank, was sworn in as minister on Sunday as part of Prime Minister Enrico Letta's new coalition cabinet, a mix of centre-right and centre-left politicians and technocrats like Saccomanni.
Saccomanni told Repubblica he wanted to "restructure the state budget" to support companies and low-earners, while cutting some unproductive public spending to create resources needed to reduce taxes.
The confidence generated by these measures could allow Italy's borrowing costs to fall sharply, he said. The interest rate differential between Italian benchmark bonds and their safer German equivalent benchmark bonds, often seen as the main indicator of investor confidence could fall to 1 percentage point or less from the current level of almost 3 points, he said.
In an interview with few direct quotes, Saccomanni said it was vital to remove political uncertainty and instil confidence to kick-start Italy's recession-bound economy.
To do this, he said he would propose a "pact" between banks, firms and consumers to boost lending, investments and consumption. He did not elaborate on what this pact could entail.
Saccomanni faces a tough task to revive the economy without allowing public finances to go off the rails and the political risks were spelled out on Sunday by a close ally of centre-right leader Silvio Berlusconi whose support Letta depends on.
Renato Brunetta, lower house leader of Berlusconi's People of Freedom party (PDL) said the government would fall unless Letta promises in his maiden speech to urgently abolish an unpopular housing tax and repay the 2012 levy to taxpayers.
"If the prime minister doesn't make this precise commitment we will not give him our support in the vote of confidence," Brunetta told daily Il Messaggero.
Comments
Comments are closed.