Regions start haggling with Renzi

Italy's regions have a "response" ready on how they can make four billion euros of spending cuts in the 2015 budget but "must meet" Italian Premier Matteo Renzi because of the "complexity" involved, Regions' Conference chief Sergio Chiamparino said Friday. The premier said Thursday he was ready to meet them amid strong criticism from regional governors, who led the backlash against the budget bill.
    The 36-billion-euro budget, which Renzi presented Wednesday, features 18 billion euros in tax cuts in a bid to boost the recession-battered Italian economy and 15 billion euros in spending cuts. The regional governments, which have seen their budgets cut severely in recent years as part of austerity measures, are being asked to collectively stump up four billion euros of those spending reductions, with another 1.2 billion euros in cuts coming from city councils.
    "The budget is unsustainable for the regions, unless you address health spending," said Chiamparino, who is also governor of Piedmont. Friuli Governor Debora Serracchiani, a Renzi confidante, said she was "sure a point of equilibrium will be reached".
    "We will meet with governors, but they must not play games with us or the Italian people. If we want to reduce taxes everyone must cut spending and pretensions," Renzi tweeted.
    "Italian families have been making sacrifices long enough".
    Consumer groups and trade unions have also blasted the bill, but industrial confederation Confindustria hailed it as bringing in measures that Italian business has been waiting for for years.
    The 18 billion euros in tax cuts will be funded from 15 billion euros saved in the government's spending review as well as 2.7 billion euros raised by a higher inheritance tax, 3.8 billion euros from the fight against tax evasion, and one billion euros in profit from slot machines.
    On the social welfare side, Renzi's budget extends the 80-euro monthly tax bonus for low-income families, but changes the formula to become a tax deduction rather than a bonus. It will apply to the same families and is expected to cost seven billion euros.
    It also allocates 500 million euros a year in aid to families with children under three, one billion euros to schools, and a guarantee fund of 100 million euros to support businesses so they, on a voluntary basis, can give advances on employee severance pay. New measures will be introduced to allow employees to access their severance pay and ensure employers can find funding from their banks. The latter measure is intended to boost consumption and restart Italy's flatlining economy.
    The bill also contains 11 billion euros in deficit spending, which might be contested by the European Commission as it assesses Italy's adherence to EU-mandated limits.
   

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