Economy / Politics

Italian hopes of economic recovery already fading

After some weeks of very cautious optimism, the Italian economic situation is getting back to the usual blackness.

The Government acknowledged that the European rule of a State deficit not exceeding the three per cent of GNP will be violated.

A new Budget Law will therefore be needed before the end of the year. The Government could be compelled to increase the amount of VAT, or even to revoke the abolition of the real estate tax.

In the meantime, the Municipalities informed the Government that they are at risk of not paying the salary of civil servants.

All of this is on the shoulders of a Government which is weaker than ever due to Mr Berlusconi’s imminent expulsion from the Parliament.

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