Italian Prime Minister Silvio Berlusconi has announced his desire to see around EUR12 billion worth of reductions in government spending in order to push through his prized programme of tax cuts.
In a bid to kick-start Italy’s ailing economy, Berlusconi is proposing around EUR6 billion worth of tax cuts, which will reduce the country’s current five income tax brackets to two, and reduce the top rate of tax from 45% to 33%.
However, Berlusconi is also under pressure from Europe to reduce Italy's mounting debt and budget deficit levels, and the EU Commission last month issued an ‘early warning’ to the Italians to bring their finances under control in order to prevent a breach of the stability pact rules.
Berlusconi has estimated that the spending cuts would be the equivilant of around 1% of gross domestic product, although the Prime Minister has not given any indication of where the savings will be made to make room for the tax cuts.
.Tags: Italy | Italy
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