The Star Online: World Updates
The Star Online: World Updates |
- Italy's Monti seeks broad support for crisis measures
- Croatia opposition set to win vote on economy ticket
- Slovenia to turn centre right for economic lift
| Italy's Monti seeks broad support for crisis measures Posted: 03 Dec 2011 04:39 PM PST ROME (Reuters) - Italian Prime Minister Mario Monti met party leaders on Saturday to drum up support for new measures designed to shore up public finances, helping growth and calming the debt crisis in the euro zone's third-largest economy.
His cabinet is scheduled to approve the package of reforms on Monday, a step widely seen as vital for re-establishing Italy's shattered credibility with financial markets after a series of unfulfilled promises by the previous government. The plan will then be outlined during two news conferences -- one with foreign reporters -- and presented in both houses of parliament. Italy has been at the centre of Europe's debt crisis since yields on its 10-year bonds shot up to around 7 percent, similar to levels seen when countries like Greece and Ireland were forced to seek a bailout. Government sources familiar with the planned reforms say the mix of cuts and tax rises will total about 20-25 billion euros over the next two years, about half of which will be used to reduce the budget deficit and help balance the budget by 2013 despite the economic downturn and rising borrowing costs. The rest will free up resources to try to regenerate Italy's recession-bound economy. Pier Ferdinando Casini, head of the centrist UDC party, said after meeting Monti that the measures would be severe but hopefully also fair. "When the doctor arrives, it's difficult to prescribe nice medicine. Medicine is always bitter, but sometimes inevitable to prevent the patient dying," he told a news conference. Angelino Alfano, secretary of former Prime Minister Silvio Berlusconi's PDL party, urged Monti to ensure the cuts did not fall heavily on people who have always shouldered the burden, and to show special consideration for families. The plan is expected to include an increase in the retirement age for many workers, liberalise professional services, increase income tax in higher income brackets and introduce new taxes on private assets and luxury goods. But it has not yet fully convinced the centre-left Democratic Party's leader Pier Luigi Bersani, who said groups like low earners and pensioners needed greater protection and that measures to fight tax evasion were insufficient. FAIRNESS Monti will meet unions and local authorities on Sunday to try to reach a broad consensus on the plan. He has said fairness is one of the key priorities of his reforms, but unions are grumbling about possible pension and labour market changes. Susanna Camusso, secretary of Italy's biggest union CGIL, said she was struggling to see signs of equity in the plan, based on what she knew so far from reports, but would wait until after speaking to Monti on Sunday to make her judgment. "We are ready to support the right decisions but also determined to oppose those we consider wrong," she said at a union meeting on Saturday. Monti will have to balance the competing needs of showing budget rigour while not choking off growth, without which it will be impossible to reduce a debt mountain equivalent to 120 percent of gross domestic product. Changes to pensions will be key in the new reform plan, with eligibility requirements toughened up for so-called seniority pensions which are based on a combination of workers' age and the years for which they have paid contributions. Programmed cuts to the national health service budget are expected to be accelerated by one year, to reduce spending by 2.5 billion euros in 2012 and 5 billion euros from 2013, a local government source said. A local housing tax (ICI) may also be reintroduced, bringing in estimated revenue of at least 3.5 billion euros per year. Other expected measures include further increases in value added tax rates and a ban on cash transactions above 500 euros in an effort to tackle tax evasion. (Editing by David Cowell and Ralph Gowling) Copyright © 2011 Reuters Full content generated by Get Full RSS. | ||
| Croatia opposition set to win vote on economy ticket Posted: 03 Dec 2011 03:31 PM PST ZAGREB (Reuters) - Croatia's centre-left opposition looks set to win Sunday's parliamentary election as voters bet the bloc can overhaul the country's floundering economy before it joins the European Union in 2013.
Led by the Social Democrats' (SDP) Zoran Milanovic, the opposition bloc known as Kukuriku ('cock-a-doodle-doo'), has pledged to boost growth in the former Yugoslav republic, create jobs, attract investment and maintain its credit rating. According to an Ipsos Puls poll Wednesday, the bloc is forecast to win a majority of the 151 parliamentary seats, as voters show their frustration with growing poverty and unemployment under conservative Prime Minister Jadranka Kosor. His HDZ party, which has dominated Croatian politics since its 1991 independence, is a distant second place in the polls. "The two things we expect from the new government are to draft a budget that shows fiscal consolidation, otherwise we are threatened with a credit rating cut, and to make a resolute start of the necessary reforms," said Davor Majetic of the national employers' association. Croatia, a popular tourist destination of 4.3 million people on the Adriatic, has seen its economy boom over the past decade on the back of foreign borrowing, but its growth ground to a halt when the global crisis hit in 2009. "The real job only begins after the election. Please stay with us when the going gets tough in the next few months. I promise we will not let you down," Milanovic, 45, told supporters at the last rally in Zagreb Friday. TURNAROUND PROMISED The former diplomat told Reuters this week the state budget for 2012 would be in place by the end of March and should reflect "how serious we are" about turning the economy around and averting a credit downgrade. "The rating agencies will give us a grace period of three months at most," he said. "But I believe we can do it." Unemployment stood at 17.4 percent in October and thousands of employees work without pay. Lack of liquidity has paralysed many local businesses and overall foreign debt has surpassed 100 percent of gross domestic product. In power for the past eight years, HDZ has been mired in corruption scandals since its former leader and prime minister, Ivo Sanader, stepped down in 2009. A number of other senior HDZ officials have been arrested or questioned over alleged slush funds in the past year. Polling stations open at 7 a.m. (6:00 a.m. British time) and close at 7 p.m., when exit polls will follow. An official, preliminary count is expected by midnight. (Editing by Sophie Hares) Copyright © 2011 Reuters Full content generated by Get Full RSS. | ||
| Slovenia to turn centre right for economic lift Posted: 03 Dec 2011 03:20 PM PST LJUBLJANA (Reuters) - Slovenia votes for a new government Sunday with the centre-right opposition set to return to power on a pledge of painful reforms to halt the European Union member's slide back into recession.
Once a model of successful post-communist transition, euro zone member Slovenia is facing renewed economic contraction, rising unemployment and a potential credit rating downgrade. The opposition Slovenian Democratic Party (SDS) led by former prime minister Janez Jansa is eying a return to office, promising to cut the budget deficit, create jobs and hike the retirement age. The outgoing government led by centre-left Prime Minister Borut Pahor's Social Democrats lost its majority in May amid internal policy squabbles and was ousted by parliament in September. Polls suggest Jansa, who was prime minister of the former Yugoslav republic from 2004 to 2008, will return to the post but will need the support of smaller parties to secure a majority. "If ever Slovenia needed a government with a strong majority ... it is in the period coming up," Jansa said on Pop TV. RECESSION An Alpine state of 2 million people, Slovenia was the fastest growing euro zone member four years ago, but its export-driven economy was badly hit by the global crisis and contracted by 8 percent in 2009. After a modest recovery, data released this week suggests another recession is on the way after the economy shrank 0.5 percent in the third quarter of 2011. Jansa's SDS has pledged to cut Slovenia's deficit by trimming public administration and accelerating privatisation. He proposes to ease a credit crunch by establishing a "bad bank" that would take over state-owned banks' non-performing loans. The party would raise the retirement age, currently among the lowest in the EU at 57 for women and 58 for men. Centre-left Ljubljana mayor Zoran Jankovic is seen as Jansa's closest challenger for the premiership. Polls open at 7 a.m. (6:00 a.m. British time) and close at 7 p.m. (6:00 p.m. British time). Preliminary results are expected by 9:00 p.m. British time. (Editing by Matt Robinson and David Cowell) Copyright © 2011 Reuters Full content generated by Get Full RSS. |
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