Lunedì, 22 Ottobre 2018
ROME

IMU rift threatens govt after IMF call

English
© ANSA

(By Denis Greenan).
Rome, July 5 - A rift over ex-premier Silvio
Berlusconi's vow to scrap an unpopular housing tax threatened to
undermine the unprecedented right-left government Friday after
the International Monetary Fund (IMF) said Italy should keep it.
Rumblings over the tax, IMU, have hit the government ever
since the centre-left Democratic Party (PD) joined Berlusconi's
People of Freedom (PdL) party as strange bedfellows to tackle
Italy's worst recession in 20 years and pass key reforms after a
two-month post-election impasse in May.
PD Premier Enrico Letta put off a June instalment and said
Thursday the government would settle the deeply divisive issue
before the summer recess - only for various ministers to say
there was not enough cash in the kitty to cover its removal.
The rift was worsened by the IMF saying IMU was a "good and
fair" tax, and it continued to roil politics Friday when the
Organisation for Economic Cooperation and Development (OECD)
said essentially the same thing.
After several PdL bigwigs had sounded off, its Senate whip,
Renato Schifani, said a government crisis was "inevitable"
unless the PD disowned the IMF statement.
Letta sought to restore calm by repeating that the
government would "supersede" IMU in a "collegial" decision, but
the PdL looked hard to mollify.
Deputy Premier and Interior Minister Angelino Alfano, seen
as a possible heir to Berlusconi, bluntly said: "We will not
accept the IMF's advice".
Earlier, the PdL's ire roared across Rome.
Reaction was swift and angry to the IMF and OECD
recommendations to retain IMU, whose elimination was the key
pledge behind Berlusconi's surprising comeback in February's
general election.
"We have already made a commitment," to cut the tax, said
the head of the Lower House finance committee, Daniele
Capezzone, a long-time former PdL spokesman.
"Reform is expected by the citizens," added Capezzone.
The IMF said Thursday that Italy cannot afford the billions
of lost revenues that are now generated by IMU.
It also said IMU is among "the fairest and most
efficient" forms of taxation, but noted that there should be
improvements, calling for an "accelerated" revision of the
country's land-surveying policies, "in order to ensure equity".
Three-time premier Berlusconi has repeatedly insisted IMU
must disappear and last year's proceeds returned to taxpayers.
Letta, whose PD narrowly beat the PdL in the general
election but failed to secure a majority, has indicated IMU will
be changed to exempt most primary residences, except for those
with big property holdings.
But the PD has never said it will scrap IMU entirely and
repay last year's take.
The IMF report came the same day that Letta said the
government would hammer out a solution to IMU before the
summer recess starting August 15.
Echoing the IMF, the chief economist and Deputy Secretary
General of the Organisation for Economic Cooperation and
Development (OECD), Pier Carlo Padoan, said Friday the
government should keep IMU.
He suggested that property taxes are the least likely to
dampen economic growth compared with payroll and other labour
taxes that should be cut to boost Italy's recession-plagued
economy.
Several ministers close to Letta, including Economy
Minister Fabrizio Saccomanni, said the government would be
hard-pressed to find alternative sources of revenue to plug the
gap left by IMU and it was "sensible" to heed the IMF's call.
But the PdL's deputy Senate speaker, Maurizio Gasparri,
retorted: "We will not submit to violence from these incompetent
managers of global finances, who are leading the West headlong
towards disaster".
Another PdL MP, Elvira Savino, said the government should
simply ignore the IMF and OECD.
"The Italian government cannot be supine in the face of
advice from international bodies, otherwise it would lose
credibility and authority," she said.
Some observers think the issue may eventually be fudged.
The squabbling partners, they say, could patch up their
differences by agreeing to get rid of IMU in name only and later
reintroduce a much-watered-down version.
Berlusconi, for the moment, is angrily denying this
suggestion.
Despite the IMU row, the government went ahead with its
reform programme Friday by launching a bill to scrap Italy's
superfluous and expensive provinces.
After a recent hard-won exemption from EU budget restraints
for job creation, the government now means to press on with
economic reforms to revive growth by helping businesses and
cutting record unemployment.
Letta has set an 18-month deadline for key institutional
reforms including a new electoral law to make it more likely a
clear winner emerges than from the current malfunctioning
system, disowned as a 'Pig's Sty' by its very creator in 2006.

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