Rome

Letta government wins 'to do' decree confidence vote

Fragile executive survives another test

Letta government wins 'to do' decree confidence vote

(By Paul Virgo) Rome, July 24 - Premier Enrico Letta's fragile left-right government survived a big test on Wednesday when it won a confidence vote in the Lower House regarding its 'to do' decree of urgent measures to help revive the recession-hit Italian economy. The House approved the decree with 427 votes in favor and 167 against. Letta's executive, which us made up of his centre-right Democratic Party (PD) and ex-premier Silvio Berlusconi's centre-right People of Freedom (PdL) party, would have collapsed if it had failed to win the vote. The PD and the PdL were long-standing, bitter rivals until they decided to work together to form a government in April after two months of deadlock following February's inconclusive general election. The government has experienced difficulties since because of differences between the PD and the PdL over several issues and there is a danger that Berlusconi's party will sink the government if Italy's supreme Court of Cassation next week upholds a four-year fraud sentence against the ex-premier. But the executive has survived for now and Letta is satisfied. "The House's vote of confidence is an important signal," the premier said. The 'to do' package cuts red tape and frees up around three billion euros for public works projects this year, which should create 30,000 temporary construction jobs. It also allocates money to finance improvements to the national rail network, school buildings and roads. The measure also cuts energy bills by a total of 550 million euros, in part by slashing a tax to finance renewable energy initiatives. The government put the decree to a confidence vote to speed its passage through parliament after hundreds of amendments were presented. Opposition parties were furious at the move, which effectively ended debate in the House on the decree, calling it a "slap" to parliament. The package looks set to face more hurdles before it is approved definitively in the Senate. Last month Letta's administration passed its first confidence-vote test in parliament when a decree on environmental emergencies was overwhelming approved by the Lower House. Letta also considered as a confidence vote Friday's rejection by the Senate of a no-confidence motion in Deputy Premier and Interior Minister Angelino Alfano over the controversial expulsion of the wife and daughter of a Kazakh dissident. Alfano is the PdL secretary and Berlusconi's party would probably have pulled the plug on the government if the motion had been approved. After Wednesday's vote Letta visited the national inland revenue agency and spoke about his government's battle against rampant tax evasion, which he blamed for Italy losing competitiveness. ''If we ask ourselves why Italy is not very competitive, I reply that it is because the underground economy is so significant'', Letta said. ''It distorts competition and creates inefficiency''. He also said that "taxes are too high in our country because not everyone pays them". The premier vowed his government would fight ''to recuperate resources (from evaders) wherever they are, in Switzerland or tax havens''. He warned tax dodgers holding capital abroad that international agreements meant the "climate is changing". He added that it was best for them "to bring back their money to Italy because the international situation does not enable them to have the coverage they've had up to now". Italy has the world's second-largest underground economy in proportion to gross domestic product after Greece in international rankings, the president of the national Audit Court Luigi Giampaolino said last month. The size of the economy outside the legal tax system is reportedly estimated at up to 18% of national GDP. Unpaid taxes including VAT meant that as much as 50 billion euros escaped the taxman in 2011, Giampaolino said.

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