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Italy populist government pact: What you should know

M5S leader Luigi Di Maio (L) and Lega leader Matteo SalviniImage copyright
AFP

Image caption

Populists poised to govern: Five Star Movement’s Luigi Di Maio (L) and League’s Matteo Salvini

The two populist parties preparing to govern Italy have published joint policies including tax cuts, a guaranteed basic income for the poor and deportations of 500,000 migrants.

The anti-establishment Five Star Movement and far-right League are now consulting their members on the plan.

The populist parties reject EU austerity and want to renegotiate Italy’s debt.

They have not yet nominated a prime minister.

Here are some of the coalition plan’s key points.

Guaranteed income for the poor

Poor families will get a €780 (£682; $919) basic monthly income, provided recipients actively seek work, the parties say.

Mass deportations

The League, led by Matteo Salvini, is strongly anti-immigration and the joint plan reflects that.

It demands more EU help for Italy, the main destination for migrants arriving from North Africa. And it insists that the estimated 500,000 undocumented migrants in Italy must be deported “as a priority”.

That would require the creation of “temporary stay facilities” throughout Italy for migrants earmarked for expulsion, the parties say.

Image copyright
AFP

Image caption

Italy’s capacity to house migrants has been stretched to the limits

The plan calls for effective relocation of asylum-seekers EU-wide – a scheme already rejected by some EU states. And it demands stronger co-operation to fight people-smuggling gangs.

Two income tax rates

New “flat tax” rates are to be introduced. The plan aims to reduce income tax rates to just two brackets, set at 15% and 20%.

Families would receive a €3,000 annual tax deduction based on household income. Sales and excise tax increases next year, worth €12.5bn, will be scrapped.

The 58-page joint pact, or “contract”, does not explain how all the extra spending will be financed. If it is approved by the parties’ members it will be presented to President Sergio Mattarella next week.

Cutting Italy’s debt

Friction is expected with the EU over Italy’s public debt; it is currently 130% of national output (GDP), the second-highest in the EU after Greece.

The populist parties say they want revisions to the EU’s Stability and Growth Pact, which sets a tough budget deficit limit of 3% of GDP.

The plan aims to reduce debt through “the revival of internal demand”, not by continuing austerity.

The plan makes no mention of Italy withdrawing from the eurozone, despite much criticism of the euro by both parties. Five Star leader Luigi Di Maio says the party is no longer pushing for a referendum on the euro.

Reaching out to Russia

The populist leaders disagree with the EU sanctions on Russia and want them lifted. They do not see Russia as a military threat, but as “a potential partner for the EU and Nato”.

They want to work with Russia against the smuggling of migrants across the Mediterranean and the continuing influence of violent Islamists. They also see Russia as a key player in ending the wars in the Middle East.

The EU and US accuse Russia of hostile anti-Western activities and relations became icy after Russia’s annexation of Crimea in 2014.

Pension reform

The minimum monthly pension is to be set at €780.

The plan abolishes the current pension reform that raises the retirement age in phases.

Instead, a new points system would combine people’s total years of social security contributions with their age. The total must be at least 100, meaning that someone who has paid into the system for 41 years, for example, could retire at 59.

Italy populist government pact: What you should know

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