Italy’s government pact envisages cutting public debt; excludes bonds acquired by the ECB from debt calculation

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The key points of the agreement reached to govern Italy include the reduction of public debt not via austerity measures but by increasing domestic demand and investing in households’ purchasing power. Whatsmore, the government bonds acquired by the ECB are excluded from the debt calculation. With respect to VAT, both parties agreed not to raise this and cut taxes on fuel. They have also reached an agreement aimed at implementing measures to reform the bureaucracy in the public sector as well as a tax amnesty to reduce the number of debtors, particularly those with financial difficulties. Furthermore, people who live below the poverty line will be paid a pension of 780 euros per month, while those pensions worth over 5 billion euros per month will be abolished.



Photo by RaSeLaSeD – Il Pinguino on / CC BY-NC-SA

About the Author

Francisco Vidal
Francisco Vidal is Chief Economist at Intermoney. Since 2006, his professional career has been focused on elaborating economic analysis for the group, which has become a reference for financial intermediation in Spain. This is a situation which has allowed him to specialise in the interrelationship between the real and the financial economy, as well as the study of monetary policy.