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Another shot in the foot? PDF Print E-mail
Jul 01, 2014 at 03:49 PM
ImageThere's a word in Italian, straffare, which basically means to overdo something. And small wonder since there seems to be something in the Italian DNA that makes a happy medium nearly impossible. Either nothing is done about something, or a law is passed that goes overboard.

Example: as of today, Italian businesses, professionals and artisans need to be able (and willing) to accept payment not in cash or by check but by debit card if the client so desires. Fine. Sounds good, right? But no, it's not. First of all, the costs of this transition for all small and medium-sized businesses will be extremely heavy - not exactly what one would want in an economy in which many sectors are at a near standstill. And, even worse, the second part of this provision says that all payments over 30 euros, currently the equivalent of $41.08 MUST be paid by debit or credit card and this is just plain ridiculous.

Italy lags far behind most other European countries in the use of electronic payments - according to one report almost 70% of Italians do not have ANY bank cards. And it is hard to imagine how thousands of older people who have never had any kind of plastic will now have to get a card AND figure out how to use it. It is also hard to fathom how the country's thousands of plumbers, electricians, carpenters and so forth will manage, forced as they will now be to lug Point-Of-Sale card machines around with them as they travel to their customers' houses.

The idea behind this, I imagine, is to find another way of cracking down on tax evasion by small businesses, professionals - doctors, lawyers etc - and the myriad artisans who generally don't even give you a receipt unless you insist on one. In principle, again, this would seem like a good idea. But not only will it further slow the economy but it will allow the government to further broaden its ability to keep track of how you and I are spending our money. But setting the bar at 30 euros is ridiculous.

And guess who will be the major beneficiary? Yup, the banks. All these small and medium sized businesses that currently are not set up for Point of Sale transactions will have to bear the cost of the transition. The Italian association of cafés and restaurants estimates that Italian businesses as a group will now have to bear an additional cost of roughly five billion euros a year.

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