Italian government outlines 'Stability Law'

Italian ministers outlined the government's "Stability Law" to regional and local government representatives at the premier's offices in Rome on Tuesday. The bill aims to plug public spending holes without resorting to a new increase in the value added tax (VAT) and to provide financial support for people left bereft of pensions by recently drafted pension reforms, among other objectives. The law would reallocate 10 to 12 billion euros, 6.5 billion of which are required to avoid the VAT increase. The necessary funds will be mustered from spending cuts outlined in last summer's Spending Review - a decree aimed at slashing 26 billion euros from the budget, through the implementation of a Tobin Tax on investment-trading transactions, and moneys derived from Italian laws scuppered by the European Union, Italian Economy Minister Vittorio Grilli told meeting participants. Grilli vowed that the Stability Law would not amount to new austerity measures. On the contrary, "The Stability law has objectives that require additional resources to finance them," Grilli said. "We are not aiming for cuts, but for reorganization," said Andrea Riccardi, minister for cooperation, while entering the premier's office for a cabinet meeting. Nevertheless a draft of the Stability Law cuts 1.5 billion euros from the 2013 health budget. It freezes public workers' contracts through 2013 and 2014, and forces them to forgo paid vacations outlined in their contracts. It bans government acquisition of new real estate, halts its purchase or leasing of new vehicles, restricts computer consulting and furniture expenses. It also doubles the sacrifices expected of Italy's five autonomous regions - like Sicily and Sardinia - slashing state funds to those regions by two billion euros instead of one billion as previously planned. Grilli, Premier Mario Monti, Deputy Premier Antonio Catricala' and turnaround guru Enrico Bondi - who resurrected Parmalat from fraudulent bankruptcy - represented the technocratic government at the meeting. Earlier in the day, Susanna Camusso, secretary-general of the powerful union confederation CGIL, threatened a general strike if the Stability Law did not address work or earnings.