Italy’s Prime Minister Silvio Berlusconi and Finance Minister Giulio Tremonti met with each other today to discuss the severe nature of Italy’s troubled economy. In this round of emergency talks, the two ministers looked on ways to speed up the liberalization of the economy.
Prime Minister Silvio Berlusconi had for months dismissed the diminishing economy, currency crisis and worsening European debt crisis as being the result of speculators making borrowing cost too high. However Italy’s debt is near 120 percent of its own Gross Domestic Product. Debt and its large amount is the cause of Italy’s debt crisis.
The Italian government plans on working out a package in the month of August to potentially call back lawmakers from their Summer recess to pass the legislation needed to curtail further damage to the Italian economy and begin solving the debt ridden country.
Included in the discussed negotiations is a balanced budget amendment to the Italian Constitution. An often proposed 28th amendment to the United States constitution, the Balanced Budget Amendment essentially limits the amount of government spending per year. If tax and fee revenue brings in a certain amount, then spending can not exceed revenues. While it is a common sense budgeting prospect that most in the private population has to attempt each year, governments around the global economy have practiced deficit spending and racked up large debts. Practical, and allowing nations to correct their debt crisis problems, United States Democratic lawmakers oppose this measure, and it is unsure how much support it will receive in the Italian government.
Also included in the proposal was the liberalization of closed professions, such as welfare reform and cutting the cost of politics. While the proposals seem fit to cut the debt and help stabilize the third largest economy in Europe, the impact on the EuroZone is uncertain as Germany has called for broader and universal reforms across the EuroZone versus these packages done individually by Italy.