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reuters:

Italy’s infamous Silvio Berlusconi pulled his ministers out of the ruling coalition on Saturday, effectively leaving Europe’s third-largest economy in chaos. 
But in a move that may give Prime Minister Enrico Letta a chance to save his government, some 20 senators may create a new group to keep Letta’s parliament power in tact. 
With Italy falling behind in its efforts to bring the budget deficit under European Union limits and youth unemployment at nearly 40 percent, the prolonged wrangling between the parties has blocked efforts to reform the economy, after two years of recession.Photo: Upper house of parliament in Rome. REUTERS/Giampiero Sposito

reuters:

Italy’s infamous Silvio Berlusconi pulled his ministers out of the ruling coalition on Saturday, effectively leaving Europe’s third-largest economy in chaos.

But in a move that may give Prime Minister Enrico Letta a chance to save his government, some 20 senators may create a new group to keep Letta’s parliament power in tact. 

With Italy falling behind in its efforts to bring the budget deficit under European Union limits and youth unemployment at nearly 40 percent, the prolonged wrangling between the parties has blocked efforts to reform the economy, after two years of recession.

Photo: Upper house of parliament in Rome. REUTERS/Giampiero Sposito

Filed under italy europe Political crisis

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nationalpost:

Silvio Berlusconi sentenced to seven years in jail for sex with under-age prostitute at ‘bunga bunga’ partyA Milan court on Monday convicted former Italian Premier Silvio Berlusconi of paying for sex with an underage prostitute during infamous “bunga bunga” parties at his villa and then using his influence to try to cover it up.Berlusconi, 76, was sentenced to seven years in prison and barred from public office for life — a sentence that could mean the end of his two-decade political career. However, there are two more levels of appeal before the sentence would become final, a process that can take months.Berlusconi holds no official post in the current Italian government, but remains influential in the uneasy cross-party coalition that emerged after inconclusive February elections. (Photos: Alberto Lingria, Giuseppe Aresu / AFP / Getty Images)

nationalpost:

Silvio Berlusconi sentenced to seven years in jail for sex with under-age prostitute at ‘bunga bunga’ party
A Milan court on Monday convicted former Italian Premier Silvio Berlusconi of paying for sex with an underage prostitute during infamous “bunga bunga” parties at his villa and then using his influence to try to cover it up.

Berlusconi, 76, was sentenced to seven years in prison and barred from public office for life — a sentence that could mean the end of his two-decade political career. However, there are two more levels of appeal before the sentence would become final, a process that can take months.

Berlusconi holds no official post in the current Italian government, but remains influential in the uneasy cross-party coalition that emerged after inconclusive February elections. (Photos: Alberto Lingria, Giuseppe Aresu / AFP / Getty Images)

Filed under Italy europe corruption trial

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Eurozone bank bailout deal throws lifeline to Spain and Italy
Italy and Spain stunned Germany by blocking progress until they obtained softer bailout rules in 14 hours of bad-tempered talks
European leaders have pulled back from the brink of disastrous failure in their attempts to rescue the euro, throwing a lifeline to the weakest links in the eurozone by agreeing to shore up struggling banks directly, remove disadvantages for private creditors and move quickly towards a new supervisory regime for banks.
David Cameron said on Friday: “The countries of the eurozone did take some important steps forward last night. There’s still important work to do.”
Amid bad-tempered talks that continued through the night, Italy and Spain stunned the Germans by blocking progress on an overall deal at a two-day EU summit in Brussels until they obtained guarantees that the eurozone would act to cut the soaring costs of their borrowing.
The tough negotiations were deadlocked for hours, prompting the departure from the summit after midnight of the 10 non-euro countries, including Britain, leaving the eurozone leaders to fight it out.
After 14 hours of wrangling, they emerged with a three-point statement rewriting the rules for the eurozone’s new bailout regime in a way likely to soften the draconian terms that have accompanied the rescue programmes for Greece, Portugal, and Ireland over the past two years.
The leaders said a new eurozone banking supervisory system should be established by the end of the year. Once it is operational, the eurozone’s new permanent bailout fund, the European Stability Mechanism, would be able to recapitalise failing banks directly, without the loans going via governments as at present and adding to national debt burdens. The shift had been demanded particularly by Mariano Rajoy, the prime minister of Spain.
The new supervisory system is likely to come under the authority of the European Central Bank. Under plans being mooted, the new banking regime is to entail pooling eurozone liability for guaranteeing savers’ deposits and a common resolution fund for winding up bad banks. But the statement mentioned neither of these two points, which are controversial in Germany, which is reluctant to accept responsibility for the conduct of other countries.
The statement added that in drawing up the terms for up to €100bn (£80bn) for Spanish banks, private creditors would enjoy the same status as the bailout fund in the event of a debt rescheduling. Previously the fund enjoyed “seniority” over private investors.
Herman Van Rompuy, the European Council president who chaired the fractious summit, described the agreement as a breakthrough.
"We are opening possibilities for countries that are well-behaving to make use of financial stability instruments in order to reassure markets and get again some stability around some of the sovereign bonds of our member states," he said.
Pictured: German chancellor Angela Merkel arrives for day two of the summit in Brussels on Friday. Photograph: John Thys/AFP/Getty Images

Eurozone bank bailout deal throws lifeline to Spain and Italy

Italy and Spain stunned Germany by blocking progress until they obtained softer bailout rules in 14 hours of bad-tempered talks

European leaders have pulled back from the brink of disastrous failure in their attempts to rescue the euro, throwing a lifeline to the weakest links in the eurozone by agreeing to shore up struggling banks directly, remove disadvantages for private creditors and move quickly towards a new supervisory regime for banks.

David Cameron said on Friday: “The countries of the eurozone did take some important steps forward last night. There’s still important work to do.”

Amid bad-tempered talks that continued through the night, Italy and Spain stunned the Germans by blocking progress on an overall deal at a two-day EU summit in Brussels until they obtained guarantees that the eurozone would act to cut the soaring costs of their borrowing.

The tough negotiations were deadlocked for hours, prompting the departure from the summit after midnight of the 10 non-euro countries, including Britain, leaving the eurozone leaders to fight it out.

After 14 hours of wrangling, they emerged with a three-point statement rewriting the rules for the eurozone’s new bailout regime in a way likely to soften the draconian terms that have accompanied the rescue programmes for Greece, Portugal, and Ireland over the past two years.

The leaders said a new eurozone banking supervisory system should be established by the end of the year. Once it is operational, the eurozone’s new permanent bailout fund, the European Stability Mechanism, would be able to recapitalise failing banks directly, without the loans going via governments as at present and adding to national debt burdens. The shift had been demanded particularly by Mariano Rajoy, the prime minister of Spain.

The new supervisory system is likely to come under the authority of the European Central Bank. Under plans being mooted, the new banking regime is to entail pooling eurozone liability for guaranteeing savers’ deposits and a common resolution fund for winding up bad banks. But the statement mentioned neither of these two points, which are controversial in Germany, which is reluctant to accept responsibility for the conduct of other countries.

The statement added that in drawing up the terms for up to €100bn (£80bn) for Spanish banks, private creditors would enjoy the same status as the bailout fund in the event of a debt rescheduling. Previously the fund enjoyed “seniority” over private investors.

Herman Van Rompuy, the European Council president who chaired the fractious summit, described the agreement as a breakthrough.

"We are opening possibilities for countries that are well-behaving to make use of financial stability instruments in order to reassure markets and get again some stability around some of the sovereign bonds of our member states," he said.

Pictured: German chancellor Angela Merkel arrives for day two of the summit in Brussels on Friday. Photograph: John Thys/AFP/Getty Images

Filed under spain italy europe Eurozone financial crisis bail out

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Eurozone four leaders agree economic growth package
Leaders of the eurozone’s four biggest nations have agreed in principle to measures to boost growth equal to 1% of the currency area’s economic output.
Germany, France, Italy and Spain outlined plans to push for a 130bn-euros (£104bn; $163bn) package.
But analysts suggest that with little or no new money involved, the significance of the agreement between the four was more symbolic than actual.
There is also still no consensus on issues such as common eurobonds.
"We want there to be a significant European growth package," said Italian PM Mario Monti.
He appeared at the press conference alongside Spanish PM Mariano Rajoy, German Chancellor Angela Merkel and French President Francois Hollande.
The four met in Rome ahead of an EU summit on the euro crisis next week.
The growth package is expected to comprise several measures already in the works to boost spending on infrastructure and other investments, backed by European taxpayer money:
Increasing the capital of the European Investment Bank by 10bn euros, which would enable the EU government-backed institution to increase its lending capacity by several times that amount;
Fully deploying unused money in the European Commission’s regional funds;
The creation of pan-European “project bonds” - common debts used to finance specific investment projects such as the construction of pan-european transport networks.
The agreement may represent a political victory for the recently elected French president, who has demanded a growth pact despite strong reservations expressed by his Germany counterpart.
Pictured:The four leaders also agreed to push for a pan-European tax on financial transactions

Eurozone four leaders agree economic growth package

Leaders of the eurozone’s four biggest nations have agreed in principle to measures to boost growth equal to 1% of the currency area’s economic output.

Germany, France, Italy and Spain outlined plans to push for a 130bn-euros (£104bn; $163bn) package.

But analysts suggest that with little or no new money involved, the significance of the agreement between the four was more symbolic than actual.

There is also still no consensus on issues such as common eurobonds.

"We want there to be a significant European growth package," said Italian PM Mario Monti.

He appeared at the press conference alongside Spanish PM Mariano Rajoy, German Chancellor Angela Merkel and French President Francois Hollande.

The four met in Rome ahead of an EU summit on the euro crisis next week.

The growth package is expected to comprise several measures already in the works to boost spending on infrastructure and other investments, backed by European taxpayer money:

  • Increasing the capital of the European Investment Bank by 10bn euros, which would enable the EU government-backed institution to increase its lending capacity by several times that amount;
  • Fully deploying unused money in the European Commission’s regional funds;
  • The creation of pan-European “project bonds” - common debts used to finance specific investment projects such as the construction of pan-european transport networks.

The agreement may represent a political victory for the recently elected French president, who has demanded a growth pact despite strong reservations expressed by his Germany counterpart.

Pictured:The four leaders also agreed to push for a pan-European tax on financial transactions

Filed under europe Eurozone germany spain italy france financial crisis

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Italy slashes its 2012 growth forecast
The Italian government has slashed its forecast for the economy in 2012.
It was previously predicting a 0.4% contraction in the economy, but has cut that to a 1.2% contraction.
The government has also admitted that it will not be able to meet its target of balancing the budget by 2013.
It now says that it will be able to balance the budget by 2015, which is still more optimistic than the IMF, which says Italy will not have a balanced budget until at least 2018.
The IMF expects the Italian economy to contract by 1.9% in 2012.
The government has raised its forecast for growth in 2013 from 0.3% to 0.5%.
The announcements followed a cabinet meeting to approve the new Economic and Financial Document.
The document predicts that Italy’s debt will increase from 120% of GDP in 2011 to 123.4% in 2012.
"Despite the progress made, there is still a long way to go in a context that is more favourable but still characterised by elements of uncertainty," the report said.
Pictured: The government predicts its debt will grow in 2012

Italy slashes its 2012 growth forecast

The Italian government has slashed its forecast for the economy in 2012.

It was previously predicting a 0.4% contraction in the economy, but has cut that to a 1.2% contraction.

The government has also admitted that it will not be able to meet its target of balancing the budget by 2013.

It now says that it will be able to balance the budget by 2015, which is still more optimistic than the IMF, which says Italy will not have a balanced budget until at least 2018.

The IMF expects the Italian economy to contract by 1.9% in 2012.

The government has raised its forecast for growth in 2013 from 0.3% to 0.5%.

The announcements followed a cabinet meeting to approve the new Economic and Financial Document.

The document predicts that Italy’s debt will increase from 120% of GDP in 2011 to 123.4% in 2012.

"Despite the progress made, there is still a long way to go in a context that is more favourable but still characterised by elements of uncertainty," the report said.

Pictured: The government predicts its debt will grow in 2012

Filed under italy europe Eurozone financial crisis austerity measures

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Italian president Giorgio Napolitano claims the British government did not communicate with Italy before an attempt to rescue one British and one Italian man held captive by terrorists in Nigeria since May 2011. Both died on Thursday during the special forces raid. Britain says it previously discussed with Italy a possible hostage rescue attempt

(Source: Guardian)

Filed under Nigeria Italy Great Britain africa kidnapping

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Vatican told to pay taxes as Italy tackles budget crisis
End of controversial property tax breaks leaves the Pope facing €600m-a-year bill
After several years of scandal in which the Catholic Church has faced allegations of financial impropriety, paedophile priests and rumours of plots to kill the Pope, the Vatican is now facing a new €600m-a-year tax bill as Rome seeks to head off European Commission censure over controversial property tax breaks enjoyed by the Church.

As the EC heads closer to officially condemning the fiscal perks enjoyed by the Catholic Church and introduced by the Berlusconi administration, Prime Minister Mario Monti has written to the Competition Commissioner, Joaquin Almunia, saying that the Vatican will resume property tax, or Ici, payments.
Mr Almunia said in 2010 that the exemption amounted to state aid that might breach EU competition law. A parliamentary proposal by the Italian Radicals party last August to repeal the exemption, with a successful petition on Facebook, upped the pressure. A spokesman for Mr Almunia appeared to give the thumbs-up yesterday: “It is a proposal that constitutes a significant progress on the issue and I hope will be implemented,” he said.
"This is a victory for public pressure," said Mario Staderini, the leader of the Italian Radicals party. "We’ve managed to break down – a little bit – the wall protecting the Church."
The Vatican avoids Ici tax on about 100,000 properties, classed as non-commercial, including 8,779 schools, 26,300 ecclesiastical structures and 4,714 hospitals and clinics.
Estimates of its annual saving from avoiding the levy range widely from €600m to €2.2bn. The Church, however, says the tax exemption is worth only €100m a year. Neither is it clear from Mr Monti’s comments how much Ici tax the Church will now have to pay.

Vatican told to pay taxes as Italy tackles budget crisis

End of controversial property tax breaks leaves the Pope facing €600m-a-year bill

After several years of scandal in which the Catholic Church has faced allegations of financial impropriety, paedophile priests and rumours of plots to kill the Pope, the Vatican is now facing a new €600m-a-year tax bill as Rome seeks to head off European Commission censure over controversial property tax breaks enjoyed by the Church.

As the EC heads closer to officially condemning the fiscal perks enjoyed by the Catholic Church and introduced by the Berlusconi administration, Prime Minister Mario Monti has written to the Competition Commissioner, Joaquin Almunia, saying that the Vatican will resume property tax, or Ici, payments.

Mr Almunia said in 2010 that the exemption amounted to state aid that might breach EU competition law. A parliamentary proposal by the Italian Radicals party last August to repeal the exemption, with a successful petition on Facebook, upped the pressure. A spokesman for Mr Almunia appeared to give the thumbs-up yesterday: “It is a proposal that constitutes a significant progress on the issue and I hope will be implemented,” he said.

"This is a victory for public pressure," said Mario Staderini, the leader of the Italian Radicals party. "We’ve managed to break down – a little bit – the wall protecting the Church."

The Vatican avoids Ici tax on about 100,000 properties, classed as non-commercial, including 8,779 schools, 26,300 ecclesiastical structures and 4,714 hospitals and clinics.

Estimates of its annual saving from avoiding the levy range widely from €600m to €2.2bn. The Church, however, says the tax exemption is worth only €100m a year. Neither is it clear from Mr Monti’s comments how much Ici tax the Church will now have to pay.

Filed under vatican italy europe economic crisis tax laws