Italian PM calls for balanced budget amendment

[Quantum Windbag]

I thought a deficit was good for the economy.

Just 48 hours after Silvio Berlusconi told the markets everything was fine and pleaded with Italian bond holders not to panic, the Italian prime minister will make a second attempt on Friday to calm market fears that have driven up the cost of Italy's borrowing to a new euro-era high.In a fresh attempt to reassure the markets, Berlusconi later Friday will announce a package of measures to speed up the liberalization of Italy's overly bureaucratic economy.
The Financial Times reported the Italian prime minister held emergency talks Friday after yields on benchmark 10-year bonds rose to 6.4% -- higher than the return demanded on Spanish government debt for the first time in more than a year. This places Italy firmly at the heart of the escalating sovereign debt crisis in Europe.
The measures will be announced after the close of markets in Milan. They're reported to include plans for a balanced-budget constitutional amendment, the liberalization of services, a speeding up of welfare reforms and other measures designed to boost Italy's stagnant economy.

Italy's Berlusconi Readies Crisis Measures - TheStreet

 

[Big Fitz]

Damn you Fiscal Common Sense and Responsible Government!!!! DAMN YOUUUUUU!!!!!

Or this works too.

 

[pAr]

... "and other measures designed to boost Italy's stagnant economy."

Other measures being notably to raise taxes which is (un)surprisingly not mentioned in your article.

Here is another one which I believe explains the situation a little better:

Italian Cabinet Approves Austerity Decree - Bloomberg

Under the package, which is in addition to the previous plan, the capital-gains tax will be increased to 20 percent from 12.5 percent, and in 2012 and 2013 the highest earners will pay an extra 5 percent tax on income over 90,000 euros a year and 10 percent on income of more than 150,000 euros.

The government will cut contributions to regional entities and administrations by 9 billion euros over the two years, and trim 8.5 billion euros from government ministries.

“While the impact of service-sector liberalization and privatizations may be positive on medium-term growth, the budget cuts are likely to have quite negative effects on the short-term GDP dynamic,” Citigroup Inc. economists including Giada Giani in London wrote in a note yesterday.

 

[Quantum Windbag]

... "and other measures designed to boost Italy's stagnant economy."

Other measures being notably to raise taxes which is (un)surprisingly not mentioned in your article.

Here is another one which I believe explains the situation a little better:

Italian Cabinet Approves Austerity Decree - Bloomberg

Under the package, which is in addition to the previous plan, the capital-gains tax will be increased to 20 percent from 12.5 percent, and in 2012 and 2013 the highest earners will pay an extra 5 percent tax on income over 90,000 euros a year and 10 percent on income of more than 150,000 euros.

The government will cut contributions to regional entities and administrations by 9 billion euros over the two years, and trim 8.5 billion euros from government ministries.

“While the impact of service-sector liberalization and privatizations may be positive on medium-term growth, the budget cuts are likely to have quite negative effects on the short-term GDP dynamic,” Citigroup Inc. economists including Giada Giani in London wrote in a note yesterday.

Raising taxes does not boost the economy.

 

[pAr]

... "and other measures designed to boost Italy's stagnant economy."

Other measures being notably to raise taxes which is (un)surprisingly not mentioned in your article.

Here is another one which I believe explains the situation a little better:

Italian Cabinet Approves Austerity Decree - Bloomberg

Under the package, which is in addition to the previous plan, the capital-gains tax will be increased to 20 percent from 12.5 percent, and in 2012 and 2013 the highest earners will pay an extra 5 percent tax on income over 90,000 euros a year and 10 percent on income of more than 150,000 euros.

The government will cut contributions to regional entities and administrations by 9 billion euros over the two years, and trim 8.5 billion euros from government ministries.

“While the impact of service-sector liberalization and privatizations may be positive on medium-term growth, the budget cuts are likely to have quite negative effects on the short-term GDP dynamic,” Citigroup Inc. economists including Giada Giani in London wrote in a note yesterday.

Raising taxes does not boost the economy.

Because you think budget cuts do? Don't make me laugh. These measures are not meant to boost the economy but to reduce the deficit.