Rome

Berlusconi calls for budget rewrite in Monti meeting

PdL unhappy about VAT rise, reductions in tax deductions

Berlusconi calls for budget rewrite in Monti meeting

Rome, October 24 - Silvio Berlusconi called on Premier Mario Monti to re-write some of the most important budget measures contained in the government's so-called Stability Law in three hours of talks late on Tuesday. Ex-premier Berlusconi's centre-right People of Freedom (PdL) party is the biggest group in parliament and therefore its support is crucial for Monti's emergency administration to be able to get the package approved. Berlusconi and PdL Secretary Angelino Alfano reiterated that they were unhappy about a 1% increase in value added tax and a retroactive reduction in tax deductions for the current tax year, ANSA sources said. The party is planning to publicly campaign for these unpopular parts of the package to be amended, ahead of general elections next spring. Monti is said to have defended the bill, which also features reductions in income tax in the two lowest bands and a series of cuts that will hit sectors including health and eduction. Tuesday's meeting was part of a series of encounters about the budget that Monti is having with the leaders of the three main groups supporting his administration of non-political technocrats. Later on Wednesday the premier is set to meet Pier Luigi Bersani, the leader of the centre-left Democratic Party, who has said his MPs would not vote for the education cuts. Bersani recently said he feared the cuts would cost the jobs of over 6,000 Italian school teachers. Monti's government has said it is willing to accept some amendments to the Stability Law during its passage through parliament. The premier has stressed though that the measures do not amount to another austerity package like the tax hikes and spending cuts his government passed last year to put Italy on course to balancing its budget in structural terms next year and take the country out of the centre of the eurozone crisis. On Monday Monti met Pier Ferdinando Casini, the leader of the centrist UDC, whose support of Monti's administration has been almost unconditional. "The Stability Law is not unchangeable and it's the politicians' job to put it into motion in agreement with the work of the (government) experts," said Casini. "All we want to do is make this budget fairer. His (Monti's) only concern is to make sure the budget's overall figure (of revenue and spending) remains the same and that the efforts the Italian people have made to regain credibility, as measured in the bond-yield spread, is not compromised".

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