Prime minister Romano Prodi has unveiled a 7 billion emergency mini-budget in a bid to bring Italys struggling public accounts under control and tide over the economy until the next budget at the end of the year. Included in the measures of the so-called manovra bis are a 2.3 billion reduction in public spending over the next two years and clamp-downs on tax evasion, such as a veto on paying doctors, lawyers and other professionals in cash.
The government has also introduced a controversial package aimed at increasing competitiveness that will work in favour of the consumer but is less popular with those providing services. The reforms affect 12 different sectors, and among the most radical changes are the abolition of the minimum tariff demanded by lawyers, engineers and other professionals, the introduction of over-the-counter-medicines in supermarkets, and the withdrawal of limitations on the number of taxi licences local authorities can issue. In addition, it will be possible to buy cars, motorbikes and boats without the services of a notary and to shut down a bank account without incurring expenses if a bank makes any changes to taxes or charges. The reforms also give greater powers to the anti-trust authority, which will be able to level higher fines on companies flouting competition laws.
It is estimated that Italys deficit could exceed 4.6 per cent of GDP this year, well over the 3 per cent limit set by the European Union, while the countrys accumulative debt (the third largest in the world) could reach 108.3 per cent of GDP - almost twice the EU ceiling of 60 per cent.