Italy unveils its prescription for EMU status
Friday 28 March 1997
Romano Prodi, the Prime Minister, said the 15.5 trillion lire (pounds 6bn) package would bring the budget deficit down to 3 per cent of Gross Domestic Product by the end of the year and thus qualify the country to join the single European currency.
But the mini-budget barely survived the horse-trading between governing parties and offered no significant structural changes to an economy the European heavyweights believe is too backward to be included in EMU even if Italy meets the statistical criteria on time.
Giulio Tremonti, the leading economic specialist in the opposition, called the package "a bunch of accounting tricks".
An important part of the package relies on raising taxes on corporate severance funds two years early and delaying end-of-contract settlements to state workers - in other words, fiddling with the timing but leaving the substance of state income and outgoings untouched.
"These are largely one-off measures that will work for this year but will fall off again in 1998," commented Ros Lifton, of HSBC Markets in London.
Most analysts had expected Mr Prodi to raise new revenue by cutting into pensions and social security.
But that was vetoed by the far-left party Rifondazione Comunista, which holds the balance of power in parliament.
Its leader, Fausto Bertinotti, at one stage threatened not to support the budget cuts at all, saying the pain was unnecessary, since Italy was effectively frozen out of the first stage of monetary union already.
sportLiverpool 5 Norwich City 1: Uruguayan striker has now scored 11 league goals against the club
arts + entsOlivier-nominated actor and singer is set to star in Lloyd Webber's musical about the Profumo affair
filmWith more than 70 per cent of early films lost, archivists are scouring the world to preserve the precious examples that remain
sportThe coach of Chalfont St Peter's under-10s football team was relieved of his duties after he sent an email to parents that said: 'I am only interested in winning'
techA piece of new hi-tech kit aims to get us scribbling again
indybestMake getting out of the wrong side of bed on cold winter mornings a thing of the past with our selection of night-time covers
life + styleClarissa Baldwin is the brains behind the slogan 'A Dog is for Life not just for Christmas'
- 1 The hardwired difference between male and female brains could explain why men are 'better at map reading'
- 2 Is this the scariest advert ever? Japanese tyre commercial comes with its own disclaimer and health warning
- 3 UK chef creates world's most expensive ready meal - a fish pie costing £314
- 4 Food poverty in UK has reached level of 'public health emergency', warn experts
- 5 I’m sure Kate Moss doesn't care about posing for Playboy. But I do
£50000 - £70000 per annum + London: Harrington Starr: Senior Automation QA Eng...
£35000 - £50000 per annum + Benefits : Harrington Starr: SQL 2008 R2/2012 Deve...
£38000 - £45000 per annum + Benefits: Pro-Recruitment Group: Creative Audit Se...
£45000 - £50000 per annum + Benefits: Harrington Starr: SQL Developer (TSQL, P...