Italian Prime Minister Mario Draghi is a man on a mission, determined to impose structural reforms long sought by Brussels in return for EU stimulus funds – despite opposition in his country.
A cabinet meeting on tax reform this week was boycotted by members of the far-right League party of Matteo Salvini, which has been part of the national unity government that Draghi has led since February.
The League had suffered a rout in the local elections on Sunday and Monday, especially in Milan, Salvini’s hometown.
Salvini said he could not give the government a “blank check” on tax reform because “in a year, Draghi will no longer be prime minister, but there will be someone who will tax the air we breathe “.
But the threat of crisis at the top of the third largest economy in the euro area never materialized, spread by a tÃªte-Ã -tÃªte between Draghi and Salvini.
Meanwhile, the Prime Minister has made it clear that nothing will deter him.
“The government is moving forward, the government’s action cannot follow the electoral calendar,” he told reporters after a European summit on Wednesday.
– A million phantom homes –
The former head of the European Central Bank was called in by the Italian president to lead the country after the previous government collapsed amid the economic and health crisis caused by the Covid-19 pandemic.
Draghi has made it a priority to secure nearly â¬ 200 billion in grants and loans allocated to Italy under the EU’s post-virus fund – and to carry out reforms demanded by Brussels in return.
“We must continue the timetable negotiated with the European Commission,” he said this week at the summit in Slovenia.
At the cabinet meeting, government ministers agreed on the broad outlines of tax reform and plans to tackle tax evasion, which would cost Italy around 100 billion euros per year.
The reform that upset the League concerned the cadastre, of which Salvini fears an increase in property taxes.
It aims to regularize the situation of the so-called âghost housesâ which have never been registered, estimated to number around one million.
However, Draghi pledged after his talks with Salvini to “avoid any increase in the tax burden”.
As with judicial reforms passed by parliament last month, which aim to speed up Italy’s notoriously tortuous legal system, property reform is being pushed by Brussels.
In 2019, the European Commission warned that “the land and property values ââ… which serve as the basis for calculating the property tax, are largely outdated”.
But Draghi’s reform would not change anything until 2026 and even after that he promised that “no one will pay more, no one will pay less”.
Another part of the reform plan, which would come into force earlier, in 2022, consists of reducing the tax burden on the middle classes.
In addition, Draghi must also address the thorny issue of public tenders and pension reform, which risks putting him again in conflict with Salvini.
A previous League government introduced a temporary measure to allow people to retire at 62 with 38 years of pension contributions, but it expires at the end of this year.
So far, however, Draghi has shown himself “willing and determined to move forward without being beholden to any party,” commented Wolfango Piccoli of political consultancy Teneo.
bh-ar / ide / spm