Rome

Letta pledges to revamp IMU by September

'Now the left must deal with our agenda' says Berlusconi

Letta pledges to revamp IMU by September

(By Christopher Livesay) Rome, May 17 - Premier Enrico Letta's cabinet on Friday approved a decree to suspend the June payment of the controversial IMU property tax after weeks of threats from ex-premier Silvio Berlusconi. The reform will cover businesses as well as homes, Premier Enrico Letta said, after Berlusconi threatened to pull the plug on Letta's fledgling right-left government unless firms got IMU breaks too. Letta, from the center-left Democratic Party (PD), said the reform showed his government had given its "first responses" to "families, firms and workers". The secretary of Berlusconi's center-right People of Freedom (PdL), the other main party backing the government, said he was "extremely satisfied" with its first move to reform the tax. "The government's first ball has scored," said Interior Minister and Deputy Premier Angelino Alfano. Berlusconi, who does not sit in government but carries immense influence over center-right lawmakers, claimed victory over the left in the reform battle, and recalled the PD losing its lead in February general elections after the PdL campaigned hard to eliminate IMU. "The left was sure to win, and instead it now has to deal with our agenda: IMU will be dropped and already by June will not have to be paid," Berlusconi said. Letta says suspending June IMU payments will buy time to prepare a comprehensive review of the tax, but he has not said it will be scrapped completely. Before Friday's cabinet meeting, Letta warned that people should not expect "miracles" from it, but said the measures it approves should give the government 100 days to carry out key economic reforms. IMU was instituted among a series of austerity measures under former premier Mario Monti's emergency technocrat government to restore health to Italy's public finances drained by the euro crisis, which helped bring down Berlusconi's government at the end of 2011. It has been widely criticised for being too high and unfair, as it is levied at an equal rate per square metre on owners of plush downtown apartments and on low-income families with flats in the suburbs. Abolishing IMU and reimbursing the 2012 revenues from it would create a hole of around eight billion euros in this year's budget. "By August we must achieve a comprehensive reform of property tax, including factories, otherwise the Letta government will fall," former minister Renato Brunetta, the PdL's House whip, said Thursday. Letta's PD and the PdL are strange bedfellows who were forced into an unlikely and some would say unnatural marriage by President Giorgio Napolitano to end a two-month post-election stalemate on April 30. This was because no single coalition had enough sway in parliament to govern alone after February's inconclusive general election. Another bone of contention between the coalition partners is the PdL's attacks on allegedly leftwing parts of the judiciary who they say are persecuting Berlusconi for political motives, after the 76-year-old media magnata's many legal woes worsened this month. The PD's Senate whip inflamed the situation on Thursday by suggesting a law that bans the holders of government licences, like the ones Berlusconi has for his TV networks, should be applied to make the three-time premier ineligible for public office. But Berlusconi sought to ease the tensions, calling off scheduled appearances at a number of rallies for local elections later this month and saying that "there is a good possibility that this government can keep going". The decree agreed Friday also featured measures to find one billion euros to refinance the budget for CIG unemployment benefits, which is danger of running out within months as applications soar.

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