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Uncertainties weigh on Italy's future

11-05-2012 14:19 BJT

by Marzia De Giuli

ROME, Nov. 4 (Xinhua) -- Only five months before an election to replace the emergency government of Prime Minister Mario Monti installed one year ago to tackle a dramatic debt crisis, recession-hit Italy faces an array of economic and political uncertainties.

The emergency cabinet has succeeded in bringing down borrowing costs, which had soared during the rule of Monti's predecessor Silvio Berlusconi, by pushing through a series of austerity measures.

Negative economic indicators, from declining household spending to rising unemployment, have shown the short-term effects of what the Italian premier, an economist and a former European commissioner, called "a bitter medicine to swallow, but that must be done for the future generations."

Last week, the government had to agree on a substantial rewrite of a package of budget measures after it was sharply criticized by business associations and consumers in raised evidence that increasing value-added tax (VAT) will further depress the recession-hit economy.

After some 1,600 law amendments were presented by lawmakers, the biggest change now is the government will scrap a 1-percent cut in the two lower bands of income tax as well as the planned reductions in tax deductions for the current tax year.

A draft bill seeking to cut expense in politics was rejected by parliament three times before winning the lower chamber approval on Friday.

Unemployment has hit nearly 11 percent, the highest since monthly records began in 2004. Ordinary Italian households, who had suffered badly in the economic recession, are starting to feel the pinch with more and more people out of job, a politician said.

Voters' anger and disillusionment with traditional mainstream political parties that are also marred by scandals have manifested themselves in the Sicilian elections, a vote seen as a test of popular sentiment before the national polls on April 7-8.

Voters in the regional polls abandoned the traditional center-right party of former Prime Minister Berlusconi and the anti-establishment 5-Star Movement became the top vote-getting party. The regional polls also saw a very low turnout of 47 percent, which was registered at 67 percent in 2008

In addition, opinion polls showed the 5-Star Movement has climbed to the second place while some half of Italians said they were undecided about how to vote or said they would abstain from the general elections, which are crucial both for Italy and the whole euro single currency region.

Meanwhile, an electoral law to replace the current one criticized for distancing politicians from voters is being held up by disagreements over the choice methods of lawmakers and the bonus that top vote-getting party would obtain to build a majority.

The Monti unelected cabinet is supported by center-left Democratic Party (PD) led by Pier Luigi Bersani, center-right People of Freedom (PdL) founded by Berlusconi and centrist Union of the Center (UDC) of Pier Ferdinando Casini.

However, Bersani has recently said his lawmakers will try their best to modify tax hikes and welfare cuts weighing too much on Italian families.

"We have always agreed to work for a serious fight against wastes and inefficiencies, but in this context the linear cuts are not helpful," he said.

Meanwhile, Berlusconi has threatened to end his party's support for the technocratic government, while magistrate Antonio Di Pietro's Italy of Values (IdV) and rightist Northern League are in opposition along with other minor parties.

Should the anti-establishment 5-Star Movement led by comedian Beppe Grillo join hands with the IdV or other leftist forces, it could win up to 30 percent of the national vote next year, professor of philosophy Gianni Vattimo at Turin University and member of the European Parliament said.

However, any future government will face an uphill task in seeking alliance to solidify its majority in parliament, according to local analysts. Should deeper confusion emerge from the vote, Italy's borrowing costs risk a return to dangerously high levels.

The administrative polls scheduled for the next months in Lazio and Lombardy, two important regions of Italy, are expected to further test the national mood.

 

Editor:Lu Jiaying |Source: Xinhua

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