Berlusconi makes 'shock' proposal to scrap property tax
Investors jittery that ex-premier might win, FT says05 February, 10:42
(ANSA) - Rome, February 4 - Former Italian premier Silvio Berlusconi has announced his "shock" proposal as part of the centre right's election campaign.
The three-time Italian premier promised to scrap the IMU property tax if his coalition wins the election, a prospect that is no longer as unlikely as it once seemed after a media blitz by the 76-year-old helped the centre right make massive inroads in the centre-left's lead in the polls. He also said a centre-right government would refund the money, in cash if necessary, taxpayers poured into the State coffers via IMU in 2012.
That much-hated tax was introduced last year by outgoing Premier Mario Monti's emergency technocrat government to help Italy put its public finances in order and ease out of its debt crisis.
IMU's predecessor ICI was abolished by Berlusconi's 2008-2011 government, a move which many, including Monti, have said contributed to the financial crisis that forced Berlusconi to resign as premier in November 2011.
"This tax has caused Italian families worry, anxiety and fear for the future," said Berlusconi, who has said he will be economy minister if his coalition wins the February 24-25 general elections.
A refund on IMU would be worth four billion euros, said Renato Brunetta, a former PdL cabinet minister and one of the party's economic leaders.
"These four billion euros will generate immediate consumption," said Brunetta, arguing that the overall value of the refund would be worth up to eight billion euros thanks to a multiplier effect. "That's half a point added to our our gross domestic product". Rosy Bindi, president of the centre-left Democratic Party, described the proposal as 'dangerous electoral propaganda'. Monti, who is standing to keep office on a reform agenda backed by centrist parties, was even more scathing, saying it was a "nice try to corrupt Italians with their own money". Berlusconi wants to "buy Italians' votes with Italians' money," Monti said in an interview on RTL 102.5 radio. Berlusconi said he would raise the money needed to finance the scrapping of IMU by raising tobacco and gambling duties and by striking a deal with Switzerland to tax financial activities there by Italian citizens.
Puglia Governor and leader of the Left Ecology Freedom (SEL) party Nichi Vendola on Monday compared Berlusconi to disgraced TV personality Wanna Marchi in the light of his "proposal".
Marchi, who was arrested in 2002 and sentenced to nine years and six months on charges of fraud and extortion, became a household name in Italy for her aggressive sales pitches for health and dietary products, before she turned to the occult and selling 'lucky' lotto numbers.
Berlusconi also said that he favours a new tax amnesty after his last government passed a controversial one in 2009-2010 that brought home 104.5 billion euros in capital and other assets hidden abroad.
"I would absolutely agree with creating tax amnesty. I have always been against the left on this," Berlusconi told the television station La7. "Absolutely yes. There is absolutely need for an amnesty. If I have a majority, it will be done". Berlusconi's comments provoked immediate reaction from the law-oriented Italy of Values (IDV) party.
The fact that his coalition is gaining in the polls - now only five points behind the leader center left - may be making investors nervous. The Financial Times on Monday attributed a plunge in the Milan bourse to Berlusconi's climb in the polls ahead of general elections later this month.
According to the financial daily's website, his ascent has "raised fears" surrounding the vote in Italy, which explains the sudden drop in the Milan bourse. Italy's major stock market fell by a full 4.5% on Monday.
The uncertainly over Italy's political future also pushed wider the spread between Italy's benchmark 10-year bond and its ultra-safe German counterpart by 20 basis points, to close at 282 points.