As Europe continues its downward spiral into financial ruin, thanks in large part to the debts of nations like Greece, Spain, Ireland, and Portugal, it’s easy for an outside observer to look at Europe as a den of fiscal incompetence. Yet, amidst the wreckage, there is some some signs of fiscal sanity coming from Italy -- and not a moment too soon either.
Last week, the Italian Senate passed an austerity budget to deal with the country’s growing debt problem, which has grown to 118% of the nation’s GDP. The bill will cut government spending by $67 billion, mainly by selling stakes in state-owned companies and tax breaks. This bill is almost pure spending cuts, as well as a push for a more privatized, deregulated economy over the next four years, which should yield a balanced budget by 2014, a rare glimmer of hope for a continent that is teetering on the brink of financial armageddon. President Giorgio Napolitano called it a “miracle” that it was able to pass as quick as it did, given the historically dog-eat-dog nature of the Italian legislature.
It’s a bit demoralizing to think that this nation’s government, famous for its corruption and greed, is able to pass a sensible, market-driven budget quicker than Washington can. Rome is embracing the concept of balancing the budget, while too many in our government consider anything close to that extreme and economically ruinous. For a nation that is supposed to lead by example when it comes to responsible democratic governing, we seem to be turning into nations like Greece and Spain more and more, while Italy becomes an example of responsible crisis management. Originally published at www.silverunderground.com.
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Very true, I've been following the Italian Budget Cut deal as well. A good majority in the Parliament there seems to see these cuts as a good thing. And there have yet to be widespread riots and protests that we have seen in Greece. These Italians are on the right track! We have a lot to learn from them if they keep these policies up. Though I doubt Washington will learn from it... time will tell. In any event I recommend Americans to study a bit about how it was done in Italy and try to see if we can't pass a similar bill here as soon as possible.
Well, this certainly is an interesting perspective. So basically you've equated privatization of State run companies (usually the utility companies like electricity and water), which has historically been shown to turn formally prosperous nations into third-world banana republics with "fiscal responsibility." It certainly would be great to sell all our State run socialist companies like the police and fire departments, libraries, and sewage treatment plants to those private companies. Then they can run them with the same disregard to human safety that they run the drug and insurance companies, and balance our budget! Woo-hoo! I definately want companies like Bayer (who knowingly sold medicine infected with AIDS for a profit) and Chase Manhattan (who, along with their banking buddies crashed the world's economy in the first place) running our infrastructure. We need people who care about profit in charge of everything and that will solve our problems. Good article!
Canada, our dear friend to the north, learned 15 years ago. Washington didn't learn then and it won't learn now from Italy. The only feasible way I could see a serious turn-around would be if the debt ceiling we not raised, forcing an instantaneous 35% cut to Washington; like that's gonna happen... I'm sure we'll get some cute baseline budget cuts in exchange for the debt ceiling raise and still be left with a larger Federal Government next year.
i am italian and i can ashure you, that those cuts will be cancelled. if you look closely, the mayor cuts are for 2013 2014. this are election years and the new goverment will cancel all.
Italy never changes.
If that's true then your just as screwed as the United States.
There is so much great work that needs to go into this. I see so much coming from this in the future.
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