Italys burgeoning budget deficit is not the only source of tension between Rome and Brussels. According to Italian financial daily, Il Sole 24 Ore, some 13 per cent of the European Court of Justice's time and resources go into investigating alleged contraventions of EU law by Italy. As of June 2005, the European Court of Justice in Luxembourg had 101 cases pending against Italy for breaking EU law; subjects ranged from company law to public contracts, competition/state aids, the environment, taxation, immigration and employment contracts. About half these cases were brought against the state by Italian magistrates, with one company law case even involving the business interests of Italian premier, Silvio Berlusconi. A potentially devastating case for Italy concerns the Irap, a regional tax on companies that allegedly contravenes EU rules on indirect taxation. This investigation could result in a 33 billion tax rebate bill for the government and open a huge hole in the budget.
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