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Renzi to go 'all the way' with public-sector salary cap

Bill on stripping provinces of powers poses confidence test

26 March, 19:48
Renzi to go 'all the way' with public-sector salary cap (By Sandra Cordon) (ANSA) - Rome, March 26 - Premier Matteo Renzi vowed Wednesday to go "all the way" on capping the salaries of top earning public-sector managers as part of his plan to tighten up and redirect government spending.

"The government intends to go all the way, whether people like it or not," said Renzi said, building on plans revealed in recent days to narrow the gap between the salaries of top civil servants and ordinary workers.

"It's the way to make peace with the Italian people," he added, while visiting a school in southern Italy, part of his pledge to tour a different school each week to highlight educational issues. His plan, which would see salaries capped at the same level as the 248,000 euro wage paid to President Giorgio Napolitano, has been controversial with some high earning managers.

However, it is likely to play well with Italians who have seen taxes steadily erode their take-home pay while the gap between rich and poor widens.

Soon after Renzi spoke, the economy ministry released statistics showing that in 2012, the latest data available, 5% of Italians reported almost 23% of all income.

Meanwhile, as part of the same theme to simplify government across Italy and trim costs, Renzi's cabinet authorized a confidence vote on a bill to strip Italian provinces of their most significant powers after struggling to drum up support in the Senate on Tuesday. The bill passed in the Senate by a vote of 160 to 133, and now returns to the Lower House after being amended.

Putting the bill, named for cabinet undersecretary Graziano Delrio, to a confidence vote was a strategy to reduce opposition by obliging supporters of Renzi to approve it or risk toppling the government. "Today is an important day for the provinces and we have a key meeting tonight on the Senate and Regions," Renzi said Wednesday morning in a post on his Twitter feed, a favourite mode of communication for the fast-moving premier. Eventually, the Renzi government intends to amend the Constitution to eliminate the provinces entirely, but that is a longer-term project as is dealing with the financial implications of eliminating an entire layer of governance.

The Delrio bill also aims to encourage mergers and streamlining of municipal governments, while other planned measures to simplify governing Italy include a bill to eventually strip the Senate of its lawmaking ability, leaving that role solely to the Lower House. The opposition Forza Italia was quick to condemn the provinces bill, with the party's Lower House Whip Renato Brunetta calling "a real scam" and "a legal fraud".

The weaknesses of Italy's complex political system were brought into sharp focus in February 2013, when a virtual three-way tie in national elections brought parliament to a grinding halt that lasted for two months.

Although Renzi has been working with his spending commissioner Carlo Cottarelli to identify billions in budget savings to redirect to other programs, on Wednesday he said that he agreed with Napolitano's call to avoid "groundless" cuts to the budget.

"That principle is absolutely sacrosanct, I agree completely," said Renzi, whose government is now picking and choosing from a list of at least five billion euros in possible spending cuts identified by Cottarelli.

Renzi also said that his government wants to change the way it manages European Union funding. "It's necessary to have the courage to say that we have to totally change our approach with the management of European funds, leaving behind a bureaucratic way of managing them," Renzi said.

There are frequent complaints that Italy fails to pocket its full allocation of EU funds and mismanages parts of the money it does receive.

Renzi added that Italy no longer faces EU meetings like a naughty child who has not done his homework because of imbalances in its public finances.

"I go to Europe with my head held high when I represent Italy, a great country," Renzi said, reiterating that Rome will respect its budget commitments to the EU.

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