Italian Senate Passes Amended 2005 Budget
The Italian Senate last week approved the 2005 budget, although some key changes
are likely to negate the effect of tax cuts which Prime Minister Silvio Berlusconi
fought hard to have included.
Under the version of the budget approved by the upper house, more than EUR1
billion will be raised in revenues from increases in indirect taxes such as
stamp duty, while local governments will be given new powers to push up rates
of local income tax. Economists fear that the benefits from EUR6 billion in tax cuts
that Berlusconi insisted should be included in budget to help boost growth,
will be cancelled out by the revenue-raising measures. "The new measures in the amendment add to my conviction that the budget
will do very little to boost consumer spending," observed Giada Giani,
an economist at Banca Intesa in Milan, according to Dow Jones. The budget also contains some EUR30 billion in spending cuts to keep Italy’s
debt and budget deficit levels in check, and must now go before the parliament’s
lower house for approval. .
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