Italy PM Enrico Letta says growth policies a priority

[muriel_volestrangler]

Source: BBC

Italy's new prime minister has said growth policies must be urgently adopted to counter an austerity drive under which the country was "dying".

In his first address to parliament, Enrico Letta vowed results in turning the recession-hit economy around within 18 months, or "face the consequences".

He said he would reform electoral law and welfare provision, cut MPs' pay and suspend an unpopular property tax.
...
"Italy is dying from austerity alone," he said. "Growth policies cannot wait."

Read more: http://www.bbc.co.uk/news/world-europe-22342867

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Analysis in the Guardian:

He talked about introducing a new electoral law; reforming the constitution to give the lower and upper houses of parliament different roles, and abolishing an entire level of government (that of the provincial administrations). But the latter was one of the few indications of where Letta intended to get the cash for what appear to be ambitious plans to boost spending and cut taxes.

This was the second point, and I’m not entirely sure that the markets – understandably relieved that the political deadlock here has been broken – have taken it on board. Letta said he would drop an unpopular tax on first homes that brought several billion last year. He plans to reduce employers’ contributions (the ‘tax on jobs’) and he said he was mulling a safety net benefit for families in difficulty because of the recession.

This is all fine stuff, and it is in line with what many economists would recommend. But it’s not exactly the kind of fiscal austerity that Berlin (and the markets, for the most part) have continued to demand of southern European countries like Italy.

Silvio Berlusconi’s people were visibly delighted. But I suspect that Letta will be in for a rather cautious welcome when he goes to see Mrs Merkel tomorrow.

http://www.guardian.co.uk/business/2013/apr/29/eurozone-crisis-italy-government-confidence-markets

[quadrature]

1. when you have nothing to say, say 'growth' .nt

nt

[muriel_volestrangler]

2. It makes a change from

"when you have nothing to say, say 'austerity'"

[quadrature]

3. point well taken.

with that said,

I get kinda tired of worn out cliches
like 'growth'.

what exactly does the world need
that can be supplied by Italy?

[muriel_volestrangler]

4. In 2011, it had the world's sixth largest industrial base

http://www.economist.com/node/18780853

The largest shipbuilder in Europe, and one of the largest in the world: http://en.wikipedia.org/wiki/Fincantieri

It's not a complete industrial basket case. Plus it has tourism.

[quadrature]

6. the world has overcapacity in many industries ...

growth is not so easy anymore.

[Dawson Leery]

5. He and Hollande need to do something about Merkel.

She is standing in the way of any progress.