My favorite part of this is Berlusconi defending the package on the grounds that it has been endorsed by the ECB and Merkel. Well, ok then. It must be fair.
http://thechronicleherald.ca/Business/1258417.html Italian labour union says austerity package unfair, theatens strike By ALESSANDRA RIZZO The Associated Press Mon, Aug 15 - 4:54 AM ROME — The leader of Italy’s largest union is threatening a general strike against an austerity package that Prime Minister Silvio Berlusconi’s government hastily pushed through to balance the budget by 2013 and avoid financial collapse. The threat came amid mounting criticism Sunday of the 45.5-billion euros (US$64.8 billion) package passed Friday in response to demands by the European Central Bank. Critics say the package — a mix of spending cuts, job cuts and tax increases, including a "solidarity tax" for high-earners — will strangle Italy’s stagnant economy, which is now expected to grow by only about one per cent this year. Other critics, including nine members of Berlusconi’s own coalition, say it unfairly targets the middle class and fails to tackle Italy’s massive tax evasion problem. Susanna Camusso, leader of the CGIL labour union, criticized measures aimed at liberalizing Italy’s labour market and targeting its pension system, saying a strike is the only way to "change the inequity of this package." She told the La Repubblica newspaper that union officials will meet Aug. 23 to set a strike date and invited other unions to join. At least one other union, CISL, said it will not take part in the protest, although it said the package needed to be improved. The new measures include 20 billion eruos ($28.5 billion) in cuts and tax hikes for 2012 and 25.5 billion euros ($36.3 billion) for 2013. They abolish some local government layers and gradually eliminate some 50,000 elected jobs — leading to fierce protests by local officials. Citizens face a 5 per cent additional tax on income above 90,000 euros ($128,250) and a 10 per cent additional tax on income above 150,000 euros ($213,750) for the next three years. Both Berlusconi and his finance minister, Giulio Tremonti, have defended the government’s actions. Tremonti insisted the debt crisis could not have been predicted but said it could have been avoided with the creation of Eurobonds, a new joint bond backed by all 17 countries using the euro. "We wouldn’t have gotten here if we had had Eurobonds," Tremonti told reporters, calling for more "integration and consolidation of public finances in Europe." Germany, the strongest economy in the eurozone, has rejected the Eurobond idea. Berlusconi called Italy’s new austerity measures fair and said they had won praise from the European Central Bank and leaders including German Chancellor Angela Merkel. EU President Herman Van Rompuy called the measures were "crucially important" not just for Italy, the eurozone’s third largest economy, but for all of Europe. "I fully support and welcome the timely and rigorous financial measures," Van Rompuy said after talking to Berlusconi on Saturday. -- Robert Naiman Policy Director Just Foreign Policy www.justforeignpolicy.org [email protected]
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