Italian politicians bicker over belt-tightening

ROME: Italian politicians scrambled Sunday to find ways to modify the government's plan for slashed spending and new taxes, a formula devised to reassure markets but which set Premier Silvio Berlusconi's allies bickering among themselves and incensed ordinary citizens.

Just before much of Italy shut down for the big mid-August holiday weekend, Berlusconi unveiled the hastily assembled 45.5 billion ($67 billion) austerity package.

Reluctantly reneging on his promise to "never put the government's hands in the pockets of citizens," the billionaire media mogul announced a "solidarity" tax of an extra 5 percent on income over 90,000 ($130,000) and 10 percent over 150,000 ($220,000).

The measures also include closing down local governments of towns with less than 1,000 citizens, speeding up the timetable for raising women's retirement age and pledging to work for a constitutional amendment to require a balanced budget.

But cries are rising from ordinary Italians as well as some politicians that the government cut its own fat. Proposals include halving the number of Parliament's handsomely paid members, and selling off villas and other state real estate. There have even been calls to break a sacred taboo by ending the property tax exemption on the Catholic church's extensive holdings in Italy.

The suggestions seemed to be reaching the ears of the government. Defense Minister Ignazio La Russa told Sky TG24 TV his ministry was considering selling off underused army barracks and other military facilities to raise cash.

A cartoon on the front page of Corriere della Sera depicted Berlusconi as a crestfallen king, crown askew, holding out a tray of state palazzi and villas with the sign "for sale."

Senate committees start work on the austerity package Tuesday, to ready it for approval by Parliament in September when all lawmakers report back to work.

"A lot of proposals, maybe too many proposals, are being examined," Antonio Azzollini, head of the Senate budget committee, told Sky. Among measures that might be modified to make the austerity move "fairer" are pension reforms and the "solidarity" tax, he said.

A Berlusconi ally, Adriana Poli Bertone, said her faction was willing to test the waters with other political parties about halving the number of parliamentarians.

Italian newspapers are awash in letters from an angry public suggesting that the number of lawmakers be reduced, or at least be docked pay when they don't show up for sessions, especially those who hold second "jobs" in law or industry.

Berlusconi's decision to pull the plug on local governments in Italy's tiniest towns especially irked grass roots members of the Northern League, a populist party led by Umberto Bossi, whose support keeps Berlusconi's 3-year-old government alive.

Bossi himself has balked at pension reform, loathe to antagonize the working class base of his party. Holding court wearing an undershirt and with a cigar stub dangling from a corner of his mouth while vacationing, the Northern League leader openly criticized the reform, saying women need to retire earlier than men so they can baby-sit grandchildren.

Berlusconi has been keeping a low profile. After vacationing at one of his seaside villas in Sardinia, he flew to his mansion outside Milan.

Some politicians are calling for a slight increase in the sales tax as more democratic than the "solidarity tax." Since tax evasion is endemic, the "solidarity" measure will largely be shouldered by salaried workers. Berlusconi had staunchly opposed raising the sales tax, but he seemed to be doing an about face. Italian news agency Lapresse quoted the premier's top aide, Justice Minister Angelino Alfano, as saying Sunday that a sales tax increase is "worthwhile, if it really softens the cuts without diminishing consumer purchases."

Union and industrial leaders have complained that the austerity package offers no remedies for the sluggish economy.

A stroll down the streets in Rome's residential neighborhoods indicates Italians cut back on vacations. Parking places usually abound in August, as families head to the sea or mountains, but not this summer. Butcher shops and grocery stores that in the past closed down for the entire month, posted signs saying they were only taking two weeks. - AP