Despite disagreeing on some measures, the main political parties backed the package of tax increases and spending cuts, which passed with a large majority of 495 votes to 88. The measures will now go to the Senate, which is set to vote them before Christmas.
Mr. Monti came into office last month amid an intractable debt crisis with a mandate to spur growth while balancing the budget by 2013. But the package voted on Friday consists primarily of tax increases, not the structural changes to the economy that many experts say are necessary to restart healthy growth.
At a conference in Rome just before the vote in the Lower House, Mr. Monti said Europe’s response to the debt crisis “should be wrapped in a long-term sustainable approach, not just to feed short-term hunger for rigor in some countries.”
“To help European construction evolve in a way that unites, not divides, we cannot afford that the crisis in the euro zone brings us … the risk of conflicts between the virtuous North and an allegedly vicious South,” he said.
In addition to austerity measures, heavily indebted countries like Italy and Greece are expected to carry out structural reforms that experts say may eventually make their economies competitive with those in northern Europe, particularly Germany’s. That lack of competitiveness has produced a chronic balance of payments deficit in the southern countries that economists say lies at the heart of the euro zone’s troubles.
It was hoped that Italian lawmakers would rally around Mr. Monti’s government of technocrats and make the tough decisions they have avoided in the past. But if his experience with this week’s measures is any guide, his government is bound to hit strong headwinds from vested interests that grip every corner of Italy’s complex, neofeudal economy.
After days of political wrangling in Parliament, the Monti government bowed to pressure from the right — most notably from the party of the former prime minister, Silvio Berlusconi — and dropped some elements of the $40 billion package of spending cuts and revenue increases, including a wealth tax and the speedy liberalization of closed professions like taxi drivers and pharmacists, a plan that drew protests from their powerful guilds. It also scaled back a newly reinstated property tax on primary residences.
After protests from the left and labor unions, most recently with a nation-wide transport system strike that blocked the country on Thursday and Friday, some counting more pensioners than workers among their members, Mr. Monti reinstated inflation increases on low-level pensions that he said would make the measures more equitable.
Mr. Monti has said he wants to make Italy more equitable — especially for young people and women, whom he has called a “wasted resource” — and to help the economy grow. But even as he pledged on Thursday to address labor reform and other structural changes in the coming weeks, he has run up against a wall of vested interests.
“In Italian society, there is no division between left and right; there’s a division between those who are inside or outside some organized groups,” said Sergio Fabbrini, the director of the School of Government at Luiss Guido Carli University in Rome. “All the main political parties from left to right represent the insiders. The left represents the pensioners, the trade unions. The right represent various insiders: the lawyers’ organizations, notaries.”
The only way for young people and women to be represented “is to have a technical government,” he added, “but of course a technical government will have to pass through the approval of the Parliament. And here again the insiders are well organized.”
Article source: http://feeds.nytimes.com/click.phdo?i=db70743f4616f307894aa1fdf547b850
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