Italy: The Politics of Procrastination

 Here is what the Roubini Global Economics analysts think abour the Tremonti Plan, exactly what I do

By Katharina Jungen and Mark Willis , Jul 7, 2011 3:13:00 PM | Last Updated

  • The Italian government in late June approved an austerity package aimed at eliminating the budget deficit by 2014 with the help of spending cuts and moderate tax increases.
  • In RGE’s view, the probability of fiscal slippage remains high, as the package—largely devoid of structural reforms—does little to address Italy’s pressing growth problems. Further, given the back-loaded nature of the austerity measures, contagion risk is likely to remain elevated as markets may grow impatient and require immediate action.
  • Political uncertainty, a weakened prime minister and increased tensions within the coalition government will likely further undermine the government’s resolve to meet fiscal targets and fully implement the terms of the austerity package. With elections scheduled for 2013, and early elections quite possible, the government may be tempted to loosen the public purse for political gain. …