Italy's Audit Court warns against more austerity
Tax increases would create 'further recessionary effects'
05 February, 11:35
(ANSA) - Rome, February 5 - Italy's Audit Court warned
against further tax increases on Tuesday, saying the danger was
that these would have recessionary effects and end up worsening,
rather than improving, the public finances.Tax hikes and spending cuts introduced by outgoing Premier Mario Monti's emergency technocrat government have boosted the national accounts, raised investor confidence in the country and eased pressure on its borrowing costs.
But they have also deepened the recession and there has been speculation another austerity budget may be needed after this month's general election to put Italy on course to hitting its target of balancing the budget in structural terms this year.
But the Audit Court President Luigi Giampaolino warned tax increases should not be considered an option, saying that the tax burden was already "out of line" and that the hikes would create "the conditions for further recessionary effects".
Giampaolino added that austerity budgets produced the "danger of shrinking the economy", stressed the need to focus on "factors in favour of helping growth" and the need to cut taxes for "a fairer distribution of the tax burden".
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