Czerulf: Italy – Berlusconi, Imu and what comes next

Silvio Berlusconi

Silvio Berlusconi (Photo credit: Wikipedia)

Flipping through the newspapers one could get the impression that things are going rather well in Italy. Relatively little space is attributed to the issues that mark the current crisis – a depressed economy, an unemployment rate that is rising month on month (specially among young people) and a political system that fails to address all these issues. One would expect that this mix of upsetting facts should dominate the headlines. Instead what keeps the nation moving like nothing else is the possible suspension (or abolition?) of IMU (Imposta Municipale Propria – a property tax) on family homes. Why is that?

This is my weekly column – out every Wednesday

Firstly, due to the high rate of property ownership in Italy a big part of the electorate is directly effected by a property tax (see graph below) – owner occupied housing accounts for close to 75 percent of all dwellings (for example in Germany it’s just over 50 percent). It is therefor an ideal topic for any politician to make easy scores.

File:Population by tenure status, 2010 (% of population).png

Secondly, Italy’s biggest media entrepreneur Silvio Berlusconi is very much interested in keeping the heads of his country fellows busy with IMU since it diverts a lot of attention away from his legal troubles (for example, the “Ruby process” or the fraud allegations in relation to Mediaset).

Thirdly, IMU is being pushed by Berlusconi to destabilizes the current government led by Enrico Letta (PD) and to bring it down eventually. Its suspension would cost EUR 8-10bn, money that the state doesn’t have. To pay for it further cut backs on education, research and innovation or higher borrowing would be required. For the PD that’s probably to high a prize for staying in government with Berlusconi’s Freedom People (PdL), a coalition that many of its supporters did not approve of in the first place.

Coming up on Czerulf’s Thoughts

And the calculation is likely to pay off for Berlusconi. According to recent opinion polls PdL is the only party currently gaining support. If elections would be held tomorrow it could expect to win majorities in both chambers of parliament. Early elections would also finish off attempts to reform the much criticized electoral law as well as legislation against corruption, evasion, organized crime.

Berlusconi can only win. And IMU is going to be the winning strike.

Internazionale: Cos’e’ l’Imu

Italy-UK-Law.com: The New Italian Council Tax: “IMU”

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Filed under Columns, English, Politics

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