Italy Government Battles to Speed Up Budget Debate
Facing hundreds of amendments from both coalition and opposition ranks, the government agreed to make a number of changes over the weekend to the financial bill and urged its supporters to rally behind the much-criticized legislation, Reuters reported.
The budget offers 7.5 billion euros ($7.6 billion) of income tax cuts and some 20 billion euros of deficit cuts which rely heavily on one-off measures, such as tax amnesties.
With the economy grinding to a halt and 2002 state spending overshooting original targets, many analysts have warned that the 2003 package is not rigorous enough to meet Italy's European Union deficit commitments.
Even a think-tank headed by the economist at Berlusconi's own Forza Italia Party has attacked the budget, warning on Friday there was a "very good chance" the deficit would exceed two percent of gross domestic product (GDP) next year.
The government has told the EU it will lower Italy's deficit-to-GDP ratio to 1.5 percent in 2003 from a forecast 2.1 percent in 2002.
But calls for greater budget discipline have largely fallen on deaf ears among coalition allies as they seek concessions for their voters.
Italian newspapers reported at the weekend that both Berlusconi and his Economy Minister Giulio Tremonti were exasperated by the constant attacks on the budget.
"What was I doing agreeing to become the economy minister of a poor country," Tremonti was quoted as saying by the press during a recent stormy meeting with regional presidents, who say the 2003 budget will cost them more than 500 million euros.
The budget has to be approved by Parliament before year end, but it has been stuck in the Lower House since the beginning of October and deputies worked through the weekend to try to clear a backlog of more than 1,500 amendments.
To speed up the process, the government introduced on Saturday a so-called maxi-amendment which sought to satisfy some of its allies' demands at a total cost of 143 million euros.
Among the changes introduced were 30 million euros of tax breaks offered to companies investing in the north of Italy -- an incentive demanded by the Northern League Party which was angry about large amounts of cash earmarked in the budget for the underdeveloped south of Italy.
Many of the other changes concerned payments to the south and Tremonti told Parliament on Sunday some 47 billion euros would be poured into the region between 2003-2006.