Wednesday, 11 January 2012

Monti in Berlin

The Chancellor of Germany welcomed the Prime Minister of Italy to Berlin this morning.  (There's something echoic in those words but the past is another country).  Italy's prime minister, in office for fewer than 60 days, is taking up Italy's place in European Union deliberations that was lost by Silvio Berlusconi until he, in turn, lost his parliamentary majority.

Senator Monti  has raised pensionable age and removed the indexation of pensions that are above 1,500 euros a month, and reduced access to pensions before  a pensionable age rising to 67; raised valuations for land and buildings taxes and reinstated first home taxation; raised VAT;  there are other, less extensive measures.   The  fall in the Italian deficit currently being registered results from his predecessor Tremonti's measures, senator Monti is piling on even more pain.

Under discussion in Berlin is growth; no further cuts will be inflicted in Italy, though he is busy, even as he inspects soaking wet German soldiers in front of the German Chancery, removing ring-fenced privilege from trades unionists, professionals, and service providers of all sorts.

A maestro of the art of waffling,  (German speakers may prefer to go to Die Welt) senator Monti has been  unspecific on Italy's requirements from Germany but there must be on the agenda: 
 - Raising the capitalisation of the EFSF (European Financial Stability Fund)
 - Agreement to the issue at least on a limited scale and for special public investment purposes of European Union bonds
 - To allow formally or informally a greater role to the ECB (European Central Bank) in the financing of euro sovereign debt
 - Measures to reflate the German economy
 - A slowing in the rate of reduction of the Italian debt/GDP ratio
 - Soliciting more generous support for the financial transactions tax (he is Tobin's pupil, after all)

They have a lot to discuss - they were still talking when the One O'clock News finished. 


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