Italy strikes against austerity

Mario Monti's austerity package could pull Italy back from the brink of insolvency. Copyright Friends of Europe

Italy’s three main trade unions have announced a joint national three-hour strike in the private sector on 12th December. This will be followed by an eight-hour strike on 19th December in the public sector.

Not surprisingly, Mr Monti’s popularity ratings have dropped significantly to 64 points, down from 74 points at the end of last month. He maintains that the austerity package is vital in protecting public sector salaries and pensions, however these areas will ultimately feel a blow in this latest round of cost-saving measures.

"I'm sure there will be protests, and I can even consider them justified, but I'm sure that citizens will understand," he told the media.

Among the more popular austerity measures are those targeting the rich, with new taxes on items such as large yachts, luxury cars and private planes; measures against tax evasion; and a 1.5 per cent one-off tax on the money brought back to Italy under the so-called “tax-shield” amnesty that was allowed under Silvio Berlusconi’s government.

Most people also agree with plans to reduce funding for political parties and cut the costs of the administrative bureaucracy.

Less popular among the Italian population though is a VAT increase of two percentage points from September 2012, and reinstating a tax on primary residences.

Like France, the country is also not thrilled about raising the minimum age for retirement from 60 to 62 for women, and from 65 to 66 for men.

Another major sticking point is the elimination of the annual inflation adjustment for monthly pensions above the minimum of 936 euros. Welfare Minister Elsa Fornero has suggested she will try to have the minimum raised to 1,400 euros, although Mr Monti has made it clear that Italy has little time to approve the plan, and any attempts to water down the package will be blocked.

Within coming weeks, unions will be fighting government plans to weaken protection for full-time employees. Instead, Mr Monti wants to grow the number of part-time and casual workers and introduce a minimum wage.

The austerity measures, which must still be approved by parliament, are part of a wider agreement that will be discussed at a key eurozone summit on Friday 9th December. Mr Monti’s package could finally pave the way for the European Central Bank to finance a bailout of the Italian government.

Cassandra Tanti