Italy's High Court Rules In Prodi's Favour Over Election Result

by Ulrika Lomas, for LawAndTax-News.com, Brussels

21 April 2006

Ruling on Wednesday, Italy's highest court, the Court of Cassation, confirmed Romano Prodi's narrow election victory last week.

The decision was made after a partial recount of just 5,000 ballots.

Although Silvio Berlusconi's supporters have indicated that despite this ruling, he may not yet be willing to concede defeat, media reports have suggested that some of his Forza Italia party's allies in the right-wing coalition will do so, with both the Union of Christian Democrats and the Northern League said to have accepted Mr Prodi's narrow win.

One of the key elements of Prodi's economic reforms is a pledge to cut the social security burden borne by companies by 5% in the first few months of a new government.

Many doubt that with Italy under pressure from the EU to cut its budget deficit, and with the country's national debt the third highest in the world, he will be able to afford the EUR10 billion needed to fund the tax cut, especially given the fragile balance of his coalition.

Prodi has also pledged to increase capital gains tax on the sale of most securities to 20%, in part to fund the reduction in the social security tax burden. He also wants to reinstate an inheritance tax that was abolished by Berlusconi, and implement a crackdown on tax evasion.

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