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Elsa Fornero weeps as she tries to explain sacrifices required of Italians after cabinet passes budget with net cuts of €24bn
Italy's "technocratic" government unveiled a package of painful austerity measures on Sunday night – so painful, indeed, that one of the ministers began to weep as she explained them to the press.
Announcing that all but the lowest pensions would be frozen next year, the welfare minister, Elsa Fornero, said: "We – and this really cost us dear, psychologically even – we've had to ask for sac…" But she was unable to say the word "sacrifices" and, brushing tears from her eyes, brought her presentation to an abrupt close.
The emergency budget, containing tax rises and spending cuts totalling a net €24bn (£21bn), is the latest of several passed this year aimed at restoring the credibility of the eurozone's biggest debtor nation. The government, headed by a former European commissioner, Mario Monti, is hoping to rush the measures through parliament before the next EU summit begins on Thursday.
But there were signs that what Monti called a "Save Italy decree" could face stiff resistance. Pierluigi Bersani, the leader of the centre-left Democratic party, said it "does not at all match our criteria for fairness".
The package approved by the cabinet in emergency session on Sunday did not contain a one-off wealth tax or even, as widely leaked, an increase in income tax for high earners. But it did restore a property tax on first homes and push back retirement ages for men and women – both measures that will hit the less well-off.
In addition, the pension freeze will cut the real incomes of all but the worst-off pensioners in 2012. The deputy finance minister, Vittorio Grilli, said the government now expects the economy to shrink next year by 0.4-0.5% and remain flat in 2013.
Monti earlier briefed trade unionists and employers' representatives. One quoted Monti as having said the choice was between sacrifices on the one hand and an "insolvent state" and a "euro destroyed by Italian infamy" on the other.
His package, however, came under fire from the right as well as the left. Two leading free-market economists, Alberto Alesina, a Harvard professor, and Francesco Giavazzi, who teaches at the Bocconi university in Milan, wrote in the daily Corriere della Sera that the government was less likely to plunge Italy into recession if it cut spending. Yet its budget appeared to be "three-quarters composed of higher taxes", they said.
