Rome, April 30 – The cabinet is set to discuss a new round of public spending cuts on Monday in the hope of raising the money needed to avoid having to increase value added tax by 2% in October.
The government is trying to avoid the planned tax hike, which is part of the ‘Save Italy’ austerity package it approved in December, amid fears that it will plunge the country further into recession.
Premier Mario Monti’s emergency government has also vowed to revamp Italy’s provincial governments after the European Central Bank called on it to push ahead with cost-cutting mergers within this layer of local government.
Proposals to abolish the provincial governments altogether were dropped last year.
“The provincial governments feature in our Constitution, although there is scope to restructure them to obtain big spending reductions,” Economy Ministry Undersecretary Gianfranco Polillo said on Monday.