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Corporate tax breaks and help to buy homes: Italy’s ‘growth decree’ to fight recession

Italy's populist government unveiled its battle plan on Wednesday in the fight to boost sluggish growth in the eurozone's third biggest economy.

Corporate tax breaks and help to buy homes: Italy's 'growth decree' to fight recession
The growth decree contains measures designed to benefit young Italians, including graduates and house-buyers. Photo: Miguel Medina/AFP

From corporate tax deductions to financial schemes aimed at stopping the country's brain drain, the coalition is scrabbling to reverse poor forecasts after Italy slid into a technical recession in the second half of 2018.

The so-called “growth decree” adopted by the hard-right League and anti-establishment Five Star Movement allocates €1.9 billion over three years to the measures, which focus mainly on companies.

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It prolongs tax breaks on investments in machinery and real estate, while reducing corporate taxes. It also earmarks some €500 million for municipalities, to be used on energy-saving projects or to shore up public buildings in seismic areas.

Young Italians get a hand with purchasing their first home, graduates who have headed abroad are offered financial incentives to return, and the government also plans to compensate savers hit by the failure of small regional banks.

“We are giving a strong boost to the country's economic recovery, with concrete measures to support businesses and investments,” Prime Minister Giuseppe Conte said on Facebook.

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ITALIAN ELECTIONS

EXPLAINED: Why does Italy have so many political parties?

As more than a hundred political parties register ahead of Italy's upcoming election, here's why and a look at the ones you need to know about.

EXPLAINED: Why does Italy have so many political parties?

Italy is gearing up for an early general election on September 25th, and so far the number of different parties and alliances in the running can seem overwhelming.

While they won’t all be approved, a total of 101 political parties and movements submitted their symbols and leaders’ names to the Italian interior ministry on Sunday.

READ ALSO: Why has Italy’s government collapsed in the middle of summer?

Meanwhile, parties are busy forging electoral alliances that include up to eight or nine members.

It may look chaotic, but a large number of small parties and numerous complex alliances is standard in Italy’s electoral system.

Here’s a look at why, how it all works, and which of the parties to watch. And we’ll try to keep it brief.

How many political parties are there exactly?

It’s not yet known for sure how many of the 101 political parties and movements which submitted their symbols and leaders’ names to the Italian interior ministry for approval on Sunday.

But not all of these submissions will be approved, and those who do go forward will need to collect the 36,750 signatures necessary for their candidates to stand for seats in the lower house of parliament, and a separate 19,500 to get onto the ballot for the Senate.

The parties also now have until August 22nd officially register their candidate lists, or liste elettorali.

These lists of prospective MPs are seen as vitally important, and as such are reported on in detail by Italian media: all of these names will feature on the ballot, and voters have the option to name up to three individuals they want to support.

Each list is headed by the party leader, who would then be their choice for prime minister. But some – usually smaller – parties choose to link their lists together under one leader’s name.

Ok, so which of these parties do I need to know about?

At this stage, it’s safe to say quite a few of the 101 parties and movements mentioned earlier are not serious contenders.

The number of parties you’ll actually need to know about in order to follow the election race is much smaller (although it’s still more than the two or three some of us are used to following in our home countries).

You’ve probably heard of at least some of Italy’s biggest political parties: Fratelli d’Italia (Brothers of Italy, or FdI); Partito Democratico (Democratic party, PD); Lega (the League); Forza Italia; Viva Italia; and Movimento Cinque Stelle (Five Star Movement, or M5S).

READ ALSO: Who can vote in Italy’s elections?

As well as these, some relatively small parties that you may never have heard of are also likely to be decisive in the outcome of the election, if not in the formation of the next government.

That includes groupings of several parties that have joined the large right- and left-wing alliances.

What are these alliances?

Electoral alliances between two, three or more parties are vital, because the way Italy’s political system works means it’s almost impossible for one single party to take enough of the vote to rule alone.

Italy essentially has a multi-party system – in contrast to the two-party system in countries like the US and UK – designed after the second world war (and Italy’s Fascist era) to prevent any one party from being in complete control.

Image: Demopolis

So parties must team up and form these alliances with similar parties to fight elections. Then, they often have to join forces with yet more parties or alliances to form a government – often, these coalition partners are from a different part of the political spectrum.

As a result, Italy has had a long series of fractious governments made up of numerous parties with vastly differing viewpoints (which, perhaps unsurprisingly, don’t tend to last very long).

Here’s a look at the three main electoral alliances in the running this time around, and the parties within them, as well as a few other contenders you may hear about in the news:

  • Centre-right

The so-called centre-right or ‘centrodestra’ alliance is led by the hard-right Brothers of Italy, the biggest party in Italy according to the latest opinion polls, along with the populist League, led by Matteo Salvini, and Silvio Berlusconi’s conservative Forza Italia

READ ALSO: An introductory guide to the Italian political system

These three heavyweights, predicted to take around 45 percent of the vote between them, have now been joined by a grouping of smaller, more moderate parties – a coalition within a coalition, if you will – who are running under one list.

This list is named Noi Moderati (‘we moderates’), and is made up of the following small parties: UDC, Coraggio Italia, Noi con Italia and Italia nel centro. 

Altogether, the ‘centrodestra’ alliance is essentially the same one that came close to winning the last election in 2018.

  • Centre-left

On the other side of the ring sits Italy’s second-largest party: the centre-left Democratic Party (PD), which is polling just behind FdI but hasn’t formed similar powerful alliances that would make it a credible challenge to a right-wing landslide.

The centre-left alliance, called the PD-IDP, is made up of four different lists, or groupings of similar small parties:

    • Democrats and Progressives (PD along with Article 1 and Socialists)
    • Più Europa (a grouping of small pro-European parties)
    • L’Alleanza Verdi e Sinistra (Greens and Italian Left, an alliance known as AVS)
    • Impegno Civico (IC leader Luigi Di Maio is heading a list including candidates from two other small parties: Centro Democratico and Psdi, the Italian Democratic Socialist Party.)

All these parties together are currently expected to take around 32-34 percent of the vote.

  • ‘Third pole’

After breaking an agreement to ally with PD, centrist party Azione formed a pact with Matteo Renzi’s Italia Viva to create a third alliance, which they called “a third pole” and described as a “pragmatic alternative to the bi-populism of the right and left”.

The two are currently running together along with a smaller party, Lista Civica Nazionale.

The so-called A-IV alliance is currently polling at five percent.

  • Five Star Movement

Now led by former prime minister Giuseppe Conte, the populist Five Star Movement is the only major party running alone.

The party is significantly diminished since it shot to power on the protest vote in 2018. 

After several years of hemorrhaging support and recently splitting as former leader Di Maio left to form his own party, Impegno Civico (which is running as part of the centre-left coalition), M5S is expected to take around ten percent of the vote – sharply down from 32 percent in the 2018 elections.

Who else is out there?

There are currently dozens of new and unaffiliated parties out there, though very few are likely to reach the number of signatures needed for their list to appear on the ballot.

In theory, some of the more notable smaller parties and movements could take a small share of the vote each – though it’s unlikely to be enough for them to obtain representation in parliament.

The better-known of these parties include single-issue parties like Italexit (Eurosceptic), which is currently polling at three percent.

There’s also the Partito Gay (campaigning for LGBTQ rights) as well as anti-establishment groups such as the Movimento Gilet Arancioni (Orange Vests Movement), while many of Italy’s most prominent politicians, such as current health minister Roberto Speranza, also lead their own small parties.

Find all the latest news on Italy’s election race here.

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