After technocrat caretaker Mario Monti’s series of save Italy measures, none of which really had the desired effect, it’s the turn of current grand coalition head Enrico Letta to come up with another save Italy decree.
Already the Letta government’s decree has been condemned by some as being little more than a fake solution which will do little to address Italy’s underlying problems. In other words, it’s yet another of those pieces of legislation so beloved of Italy’s politicians – a classic example of ‘everything changes so everything stays the same’, its detractors will argue.
Is the decree really that bad? Well, on paper it doesn’t look too bad, even if it can hardly be described as adventurous. Heaven knows what organ transplants have to do with kick starting Italy’s economy either.
Exactly how all these measures will work in practice remains to be seen. Conspicuous by its absence is anything designed t0 cut down corruption. Nor is there anything on slashing Italy’s horrendously high taxes, alas. And a VAT increase is still incoming too.
No mention is made regarding making Italy’s banks more business friendly. Extending credit at low to negligible rated to businesses with outstanding payments so they can pay taxes would make a lot of people’s lives easier, for example. Still, this is Italy, so perfection is not to be expected.
Here’s a summary of the points of interest from what could be called Italy’s to do list.
For businesses, managing VAT for contractors and sub-contractors should become easier.
If Italians end up in debt, which is often a consequence of not being able to pay taxes in Italy because nobody bothers paying you, Italy’s rapacious tax man will no longer be able to take away your main place of residence, unless your house falls into the luxury category. In this case, presumably, those in debt will have to sell off their massive mansions or castles and move into humbler abodes.
Presently, if you owe the taxman €20,000 or more, he can initiate proceedings to take a house off you. If you only have one house, then that is the house which will be sold off to settle your tax debts. The debt limit is to be raised to €120,000 before steps can be taken to force the sale of any property you own, with the exception of what is your main place of residence.
As for paying off those back-taxes, soon in Italy you’ll be able to do this over 120 months instead of the current 72 months. And you’ll shortly be able to miss up to 8 – non consecutive – payments before the tax man terminates your ability to pay off your back taxes in installments. Currently, if you miss 2 payments, you lose the right to pay off your back taxes bit by bit.
Education, University and Research
Various measures will be introduced to encourage research, provide funding to bright students, and make Italy’s university funding system simpler.
Italy may see businesses being set up by universities to exploit research findings, as happens in the USA, for example.
To kick start Italy’s flagging manufacturing industry, businesses wanting new plant and equipment will be able to ask for subsidized finance. And those new machines should cost less to run.
Electricity should come down in price and encouraging more competition in Italy’s natural gas and fuels sector may push energy prices even lower.
There’s mention of ‘mixed business’ activities, whatever these may be. Well, they’ll get subsidised finance, provided anyone can understand what type of ‘mixed business’ qualifies.
Italy is to get zero bureaucracy in some zones. Which zones exactly is not detailed in the official press release. It’s not exactly clear what zero read tape is, either.
Making Italian Justice More Civil
Italy’s civil justice system is to be tweaked to make it more efficient.
Italy lies in 158th place in the world in the time debt recovery takes. It is hoped that improvements in this area may make Italy more appealing to foreign investors.
An attempt is also to be make to clear a huge, and growing, backlog of civil cases.
Stop reading, start speaking
Stop translating in your head and start speaking Italian for real with the only audio course that prompt you to speak.
Aside from easing access to wifi in Italy to bring it in line with the rest of Europe, which has already been done anyway, the Boot is to get more streamlined governance of digital economy. Just what this will mean in real terms is anyone’s guess. Italy is just about at the bottom of the European class in terms of e-governance.
Italy is to throw some €3 billion at its infrastructure, which is no bad thing. However, the projects which will supposedly kick off and should create around 30,ooo jobs seem to focus more on Italy’s centre and north. Italy’s south, as usual, is being largely abandoned.
The rail system in Italy’s deep south does need work, but there’s very little mention of any attempts to modernise it. If you happen to have read Tim Parks latest book Italian Ways, you understand that giving Italy’s deep south a decent rail system would boost tourism in the area. This, alas, does not look as if it will happen. As Mr Parks noted in his recent book, Italy does have a tendecy to spend huge globs of cash irrationally. Politics takes precedent over practicality in Italy, hence the mess the nation is in.
A lot of the public works listed appear to be tasks which should have been carried out years ago anyway. It’s no secret that far too many of Italy’s schools are falling apart, but before doing anything, Italy had to wait until it was in deep recession. Still, the school repair works may prevent a few building businesses from going under, if that is, the local authorities paying for the works pay up on time. Italy’s local authorities are some of the slowest payers on the planet. To try and persuade them to pay up more promptly, late payment sanctions are to be levied and fast-track courts are to be set up to sort out the really bad payers. It sounds good, on paper.
Italy’s bridges, tunnels and roads are to receive make overs in a bid to increase road safety.
In simple terms, building should become quicker, or that is the intention behind reducing Italy’s reams of red tape – another aspect of the decree.
Now, it’s not entirely clear what organ donation has to do with dragging Italy’s economy out of the doldrums, but Italy’s mandarins seem to think making it easier to donate will have some beneficial effect. Organ donation systems are to be sped up. I guess this will get some people back to work faster, if, of course, they have jobs to go back to.
The management of the extraction of water from underground sources is to be simplified and accelerated.
The amount of red tape concerning excavated soil and stone should be reduced, provided said excavated soil and stone is a byproduct and not refuse.
Setting up campsites should become less complex and this may help boost tourism business in some areas of Italy.
Specific measures to sort out refuse disposal issues in Italy’s Campania region will also form part of the new to do list decree.
It should become easier – read faster – for the children born on Italy to parents who are foreign nationals to obtain Italian citizenship when they reach 18 years of age. This is a tentative step towards granting those who are born in Italy citizenship automatically. Italy won’t go in this direction just yet because the issue is a political hot potato.
There you have it. Nothing is exactly revolutionary – hence the criticism.
Where’s the money going to come from? A little creative accounting and shuffling cash from the coffers of one government agency into another should do the trick, it is hoped. Just what effect this will have on Italy’s staggerlingly high, and growing, public debt, remains to be seen, but bigwigs in Europe seem to think Italy will be OK.
Most of what is going to be done, if it does indeed end up on Italy’s law books, is what needed to be done ages ago. Why Berlusconi did not bother is anybody’s guess, but poor Silvio did have other things on his mind, such as the odd court case or three.
The organ donation thing is just plain odd, as is the absence of anti-corruption laws, which, in case Italy’s government has not noticed, is also something which puts off foreign investment.
What is intriguing is that Italy has been aware of all its little problems for decades, and has had lots of time to think up solutions. For some reason though, it has left acting to the last possible minute and the measures proposed stink of being cobbled together in record time too. Why Italy’s darling political parties could not have started proposing solutions long before is an unknown. Italy has never been the most forward thinking of nations, though.
Source: The full text of the Save Italy to do list decree is on Italy’s government website, in Italian (it should be in English, at least) here: “Decreto Fare”