Latest News:  
Beijing   Moderate rain    27 / 22   City Forecast

Home>>World >> Europe

Italian budget plan unlikely to ease market fears: experts


10:03, August 15, 2011

MILAN, Aug. 13 (Xinhua) -- Italy's 45.5-billion-euro (about 64 billion U.S. dollars) austerity program approved Friday in a bid to avoid a debt crisis may help boost growth but will not calm market fears, local experts said.

The budget plan reinforced a previously-approved austerity package of 70 billion euros in an attempt to balance the budget in 2013 instead of 2014 under pressure from the European Central Bank (ECB).

According to analysts, the bill will not affect very rich people and tax evaders, as only half a million Italians, only 1.2 percent of total taxpayers, will be affected by the introduction of an additional 5 percent income tax on individuals earning more than 90,000 euros per year.

"In fact, this kind of choices only hit those employees who honestly pay taxes. Why hasn't the government aimed at hitting all those self-employed workers who keep evading taxes," said Carlo Garbarino, a profess or of Taxation at Milan Bocconi University.

As a consequence, the plan will fail in assuaging investors who have been hardened by the daily struggle for survival, observers say. Italian society and the economy have been stagnant for years. Millions of young people are unemployed, and many pensioners have become impoverished.

Italy's economy is expected to grow only by about 1 percent this year, while the country's Central Bank on Friday said public debt topped 1.9 trillion euros for the first time in June.

According to recent researches based on official data, the yearly tax evasion amounts to 150 billion euros.

"The government keep saying that fundamentals of the Italian economy are sane, but this is not what savers think looking at the continuous bad performances of the stock exchange," said Paolo Legrenzi, an Economic Psychology profess or at Venice university.

In his view, it will take at least 10 years for Italian investors to regain trust in markets.

"Many people may decide to invest in the real estate market, which is perceived as safer. Such a bad situation has only happened in the Thirties. I am afraid that we will have to wait for a new generation of investors to regain trust," he said.

Among measures that may favor the country's almost nonexistent growth, the privatization of municipal services and laws to ease hiring and firing of workers in Italy's rigid labor market go in the right direction, but many steps still need to be done, said Angelo Panebianco, an International Relations professor at Bologna university.


Leave your comment0 comments

  1. Name


Selections for you

  1. Aircraft carrier returns to port after maiden voyage

  2. China cuts number of high-speed trains running between Beijing and Shanghai

  3. Lin Dan of China clinches fourth title at badminton worlds

  4. Model contest held in Weihai, China's Shandong

Most Popular

What's happening in China

Bei Dao: Today's Chinese literature is uninspired

  1. China appoints former Spanish national coach Camacho as coach of national soccer team
  2. Bridging the gap: A year of one's own
  3. Protest breaks out over officials' conduct
  4. Rise in birth defects seen as pairs skip checkups
  5. 54 high-speed rail line recalled over safety concerns

PD Online Data

  1. The Tartar ethnic minority
  2. The Xibe ethnic minority
  3. The Miao ethnic minority
  4. The Maonan ethnic minority
  5. The Lahu ethnic minority