Italy to slash political jobs in new austerity

By Alessandra Rizzo

Associated Press

Published: Saturday, Aug. 13 2011 9:38 a.m. MDT

Italian Finance Minister Giulio Tremonti listens to questions during a press conference in Rome's Chigi palace, Premier's office, Saturday, Aug. 13, 2011. Italy's government has approved euro 45 billion ($64.12 billion) in cuts over the next two years to balance the budget by 2013 to meet demands of European Central Bank.

Riccardo De Luca, Associated Press

ROME — Italy's government vowed Saturday that its new austerity package will slash the country's huge bureaucratic costs, with thousands of jobs and local elected posts being gradually eliminated as small towns consolidate.

Premier Silvio Berlusconi has even called the cuts "excessive," but said they were approved because widespread discontent among citizens over the perks enjoyed by Italy's political elite.

The government on Friday approved the €45.5 billion ($64.8 billion) in emergency measures over two years to balance the budget by 2013 in response to demands by the European Central Bank. The package — a mix of spending cuts and tax increases, including a "solidarity tax" for high-earners — aims to calm market turmoil and make sure Italy is not the next victim of Europe's debt crisis.

Cabinet Minister Roberto Calderoli said Saturday the number of national lawmakers, currently almost 1,000, would be halved — though this requires a lengthy constitutional process.

He said provincial administrations for towns with less than 300,000 people or smaller than 3,000 sq. kilometers (1,160 sq. miles) will be abolished. Provincial administrations — in-between municipalities and regions — are seen by many as redundant and expensive.

While the exact number will be determined by a fall census, the measure is expected to affect between 29 and 35 provincial governments, Calderoli said. Newspaper La Repubblica said these include Siena, Trieste and Prato, an important business center outside Florence.

Towns with fewer than 1,000 residents will merge with larger communities, a change that affects about 1,970 municipalities out of 8,094 nationwide, according to the government.

These cuts mean that some 5,000 elected jobs will be slashed, plus several thousand related jobs, Calderoli said. The measures will take effect at the next local elections.

The issue of excessive administration has been a mainstay of the Italian political debate for years. But citizens have expressed new outrage recently that Italy's political class was being spared fro cuts.

Some critics said the measures didn't go far enough, others said they targeted mostly local administrations.

However, lawmakers in Rome saw their "solidarity tax" doubled compared to other citizens, who face a 5 percent additional tax on income above €90,000 ($128,250) and a 10 percent additional tax on income above €150,000 ($213,750).

Rome already passed a €70 billion ($99 billion) austerity package last month, but the government says the financial situation has deteriorated significantly since then. Under intense pressure from the European Central Bank and eurozone political leaders, the government agreed to speed its goal of balancing the budget to 2013 instead of 2014, and to come up with structural reforms that stimulate investment and growth.

The news measures were passed in an emergency decree approved by the Cabinet. The decree is effective immediately but must be turned into law by parliament within 60 days.

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