A POSTCARD FROM ITALY WORTH NOTING

Rome – 12.13.11 – As welfare Minister Elsa Fornero spoke to the nation about the passage of new austerity measures to be enacted by the Monti government, she broke down in tears and could not continue. Prime Minister Mario Monti, an economist rather than a politician, rushed to assist and finish her remarks. Italian workers are now seeing a rise in their retirement ages, elimination in pension cost-of-living adjustments, an army of new tax initiatives, and deep cuts in the amount of money the central government will pay to regional governments. But the obvious distress of Ms. Fornero in announcing these measures has actually produced a measure of sympathy for the new reforms. Italy is now one of the few domocracies in the world to be run by professional economists instead of long-time political leaders. American’s visiting Italy during the next several months should be prepared to discuss recent events in the country. It is expected that visitors to Italy will see modest increases in tourism-related taxes as the general feeling in the travel sector is that the current 18% VAT tax mnight be as much as traffic can bear. But it is expected that local taxes will include hotel stays and restaurant meals making the colpst of a vacation in Italy soar in time for the summer 2012 season.