And what with the price of gas...

The decree says that when used government limousines - generally large, luxury sedans - it should be because it is a necessity and not to confer prestige. In other words, except for the highest-level officials, the cars should no longer be assigned to a particular person but to an office. All too often, politicians or sometimes other officials have been known to use these cars for private use, such as taking their wives shopping or getting to the stadium on time.

A census is now underway and if data is not yet complete, so far it would appear that the two regions with the highest number of "auto-blu" are Liguria and Tuscany (both traditionally governed by the moralizing center-left. On the central level, the cars are generally bought by individual ministries or other state offices. The ministry of Defence is reported to have had a "parco macchine" - a fleet - of around 1700 cars but recently purchased 4000 Maserati luxury sedans. I don't know how many the Interior (police) ministry has, but it should be remembered that hundreds of Italian officials have been assigned police escorts that generally include at least two cars, both of which probably bullet-proofed.

One can only imagine the expense involved, collectively, in running all these cars. But if savings would account for only a small percentage of Italy's mammoth debt, limiting their use would send an important signal to a population being called upon to pay more and higher taxes.

Senate personnel is very highly paid

It's hard to gauge exactly what kind of approval rating the new Italian government has, but it seems obvious that its popularity (or lack thereof) among ordinary Italians may depend on whether or not it is prepare to challenge some of the country's powerful lobbies, including Italy's overpaid MPs and the people who work for them. At a time when people here are going to have to pay higher real estate taxes, receive lower pensions or be forced to continue working for more years than he or she thought, there is a great desire to see cuts imposed on the pay checks, indemnities, and privileges enjoyed by those working - in one capacity or another - in the political sector. And I believe that if this government can create a groundswell of popular support behind it, that it will be difficult for Italy's parties to unseat it before regularly scheduled elections in spring, 2013. Otherwise, they may get antsy at being left on the outside.

And about time, too!

On December 30, 80 tax inspectors descended on the luxurious winter resort of Cortina D'Ampezzo in the Italian Alps and brought about a Christmas wonder. Cafes, restaurants and stores selling luxury goods that a year earlier (and two years earlier as well) had done vey little business, suddenly saw their daily earnings increase by from 300 to 400 percent. "Miracolo!", a miracle, the newspapers trumpeted. Actually, there was a more terrestrial explanation for the sharply increased revenues: The arrival in town of the inspectors clearly led all these businesses to ring up all sales on their cash registers instead of unobtrusively slipping bank notes into the cash drawer.

Earlier this year the New York Times wrote a story which referred to tax evasion as the "Italian national sport". I thought that was pretty stupid, banal and hardly original, as it has been said (stupidly) before. There are several reasons why so many people in Italy cheat on their taxes, and while they are often inter-related, none of those even remotely resemble a game.

In any event, the figures are HORRIFIC and it is understandable that the Monti government - which was appointed to get  Italy's accounts into order - has seemingly serious plans to really crack down on cheaters. Statistics published in major Italian newspapers in recent weeks give a good idea of just how serious is the problem. Mind you, these figures have been published many times, before, every time some politician or analyst starts wringing his or her hands over a situation about which nothing is ever done. This time, hopefully, things will be different since Attilio Befera, currently the head of the Agenzia delle Entrate (the Italian IRS) estimates that every year Italians fail to pay €120 BILLION in taxes owed, that's $156 BILLION).

Aaaaah. No Silvio here!

A week ago, Italy's new prime minister Mario Monti, announced the "Save-Italy" emergency austerity package designed to save some 30 billion euro in 2012 and to set in motion some virtuous tax and reform that hopefully will put this economically and financially-troubled country back on track. But the last word has yet to be said.
The austerity package was passed as what the Italians call a "decree-law", a temporary decree which then has to be voted into law by parliament and the legislature is now examining the more than 800 amendments that have been tabled.

Italy's new prime minister, economist Mario Monti, is burning the midnight oil, scurrying back and forth between meetings with European and EU leaders in Brussels and elsewhere cabinet meetings in Rome where he is putting together what is expected to be a 20 million euro austerity package that will be including important structural reforms. The plan is also supposed to include some economic stimuli to ward off the recession that the Paris-based OECD predicted this week for Italy in 2012.

OECD said in report that next year Italian GDP will contract by 0.5%, that overall unemployment will rise from 8.1% to 8.3% (and to 8.6% in 2013), but that prices will rise by only 1.6% compared to 2.7% this year.

The most important of the expected structural reforms is that of pension reform; something that has been talked about for years here but which previous governments have shied away from because of possible political repercussions. This week Italian newspapers predicted that the Monti government of technocrats and other experts would be raising the number of years of work needed to retire from 40, as of now, to 41 or 42. The unions have already said this was unacceptable but it is unclear at this stage if they can be persuaded to go along with the government's plan. It is also being said that the new minister of Welfare, Elsa Fornero, is planning to greatly speed up the Berlusconi government's plan to bring the retirement age for women up to 65, the same as for men.

Strangely enough, for the time being Italy's major political parties, including both Berlusconi's PdL and the left of center PD, seem to be carrying through on their pledge to support the Monti emergency cabinet. Berlusconi has repeatedly said he would oppose any plans for a "wealth tax" (the current talk is of a special levy on annual incomes of over one million euros). But generally speaking he continues to praise Monti, saying he is "working well". The former prime minister, relieved of his government duties, has been spending his time attending court sessions of some of the trials he is involved in; after all, he can no longer claim immunity as head of government. All in all, he has been keeping a low profile which is, most agree, a considerable change for the better, a real relief.

Also striking, and I myself am most surprised by this, the parties seem to agree that the Monti government need not be short-lived, as originally imagined, but could last until the regularly-scheduled elections of spring, 2013. The new premier, however, has reportedly agreed not to get involved in very political questions like a new electoral law. But who knows. The parties may decide that it might not be such a bad idea after all, especially if they can reach an agreement behind the scenes that would avoid the public bickering that has led many Italians to become really turned off.

Berlusconi opponents exult (Corriere della Sera photo)

Silvio Berlusconi is no longer the prime minister of Italy. As promised, the 75-year old controversial, conservative politician resigned his office tonight just a few hours after a majority in the Italian parliament approved a promised austerity package, although it is no secret that stronger and harsher measures will have to follow if Italian finances are to be set right. 

Immediately after Berlusconi's, Italian President Giorgio Napolitano officially announced a schedule for the meetings with former Italian presidents and Italy's major political leaders that by law and custom must precede the formation of a new government. The 86-year-old Napolitano, who has been working ceaselessly to find a political solution to break the current stalemate that has put Italy in its most serious financial plight since 1992, is set to ask respected economist Mario Monti to try and form a new government.

Berlusconi, who has dominated Italian politics for the last 17 years and served three terms as head of government, two of which were the longest in Itaian history, agreed earlier this week to leave office when it became clear that by remaining in power Italy's finances - a spiralling public debt that the country could find itself unable to finance - would only worsen.  He promised Giorgio Napolitano, the country's 86-year old Italian president, he would resign as soon as the parliament passed the so-called Stability Law,
A series of emergency measures that his government had put together in recent weeks to try and start a process or structural reform requested by both the European Union and the International Monetary Fund.

And he has kept his word, reportedly also trying to convince the recalcitrant inside his own party that they should support Monti and a largely technical government that would remain in power until additional austerity measures - higher taxes, a wealth tax, a pension reform are just a few of the steps that will have to be taken - are adopted. After which, new elections would be held. Berlusconi's party reportedly has also set other conditions. One is said to be that after enacting the austerity measures, Monti not remain in power and second, the presence in the government as deputy premier of Gianni Letta, a  long-time but fairly respected Berlusconi advisor, but this latter demand, it seems to me, will be totally unacceptable to everyone else.

Some here are still hopeful that the new government could be a national unity coalition bringing  the Berlusconi right and the left-leaning opposition together to act in the country's interest. But there is so much political tension here that such a solution is highly unlikely.

Crowds of several hundred Berlusconi opponents gathered outside  Palazzo Grazioli, Berlusconi's private residence two blocks from Palazzo Chigi, the seat of government, and also outside the Quirinale Palace, whistling (whistles are a sign of disapproval in Italy) catcalling, waving signs reading phrases like "Finally!", "Liberation!", "Today is our Independence Day", singing the "Hallelujah" and shouting insults such "buffoon" and "whoremaster" .

Wire services reported that Berlusconi said he was aggrieved by the degree of hostility of the crowds - and I have to admit I myself found it a bit overdone, especially because he has behaved so honourably in the last few days. But although it is hard to measure exactly what proportion of the population actually is fed up with Berlusconi (let's not forget that for years he had a huge following), there is no doubt that now he is despised by thousands, perhaps even hundreds of thousands. I personally do not know anyone who admits to wanting him to stay in power. And I am talking about people from every social class and walk of life and, in addition, not just leftists.

Ironically, then, it wasn't the years of corruption charges (and several trials), sex scandals and what many people (including me) think of as inappropriate behaviour - stupid jokes etc - on the international scene, to lead him to go. Berlusconi has been brought down not by his unhealthy obsession with young women (his now estranged wife said two years ago that he was a very sick man), but by his failure to govern incisively and effectively and by his refusal to look Italy's economic and financial problems in the eye before things precipitated to their current state.

Comeuppance!

Berlusconi is a total narcissist, and for all we know may even be able to convince himself in the coming days that he is not to blame. But narcissists do not take humiliation well and he has been roundly humiliated by the rout suffered by Italian treasury bonds today and yesterday and its impact on the world's stock markets. It wouldn't surprise me if he were to sink into a deep depression, once he realizes that despite all his dreams of grandeur, he is likely to end up in history books as the man who almost brought this wonderful country called Italy to its knees.

Snide smiles about Berlusconi

A visitor would never guess it. On the surface, life continues here in its usual pleasant way. Here in Rome, people are enjoying a few days of mild weather sitting outdoors, drinking their aperitivi and chatting happily on their cell phones. Aside from the coastal areas of Liguria in the northwest, where floods last week caused disastrous mudslides that killed at least nine and caused vast damage to areas like the Cinque Terre, many Italians appeared more concerned about the recent death of  a young motorcycle racer than about their faltering economy and a financial mess that is threatening both this country and Europe as a whole.

Appearances, of course, can be deceiving. The number of young people who turned out for what was meant to be a peaceful march two weekends ago, indicated that many people gave little or no credence to Premier Silvio Berlusconi's repeated assurances that all was well here and that there is, instead, much to worry about. Years of sluggish economic growth has created an extremely worrisome situation and new statistics show that this September the rate of unemployment for young people between the ages of 15 and 24 climbed to 29.3%, up more than a percentage point since August and at its highest level - one out of three - since January 2004.  True, many of these young people could find work if they were willing to take the jobs their fathers and mothers held, such as short-order cooks, waiters, plumbers, house cleaners, strawberry pickers and so on; the jobs that ae now held by immigrants from other countries who don't turn up their noses at honest work. But it is clear, that Berlusconi will now have to stop with the pollyanna act for there is cause for real alarm.