Sweeping public sector cutbacks in Italy are met with opposition from public employees, workers' unions, mayors, and the national association of pharmacists. The bill was nevertheless approved by the Chamber of Deputies and will now have to pass in the Senate.
The spending review imposes the downsizing of the public administration budget. This is to include wage freezes until December 31, 2014, a reduction in future hiring (including the total freeze of managerial hiring until 2015), and a -10% reduction of the staff (-20% among the managers). Early retirements and mandatory mobility are some the proposed strategies to “manage” excessive personnel. €300,000 per year is the new limit to the wages of top-tier managers in public service.
For the much advertised “reduction of the costs of politics”, the decree introduces the reduction of the number of provinces from the current 110 to 50-52. The budget of the operational expenditure of the Presidency of Council is reduced by €15 million, while the service of representative’s official cars (the so-called “auto blu”) is reduced by half.
Healthcare spending will be drastically reduced, with the loss of 30,000 hospital beds and a total reduction of €3 billion in the budget of the Fondo Sanitario Nazionale (National Healthcare Fund). In addition to the general wave of cuts that will affect national healthcare spending, the Income Tax (IRPEF) will also rise in the 8 regions whose healthcare spending is considered too high (Piemonte, Lazio, Abruzzo, Molise, Campania, Puglia, Calabria, Sicilia).
The proposed cuts of €200 million to the public universities have been eliminated, while the transfer of €200 million to private schools and universities, proposed in the first draft of the decree, was also cancelled under public pressure.
Recent amendments include between a tuition hike of 25% to 100% for students who fail to graduate on time, higher fines for public sector unions that go on strike, no public funding to be bestowed on privately owned artistic heritage (as the first draft suggested), and the economic indemnities for former University professors who left more lucrative business and went back to teaching were also eliminated. All the ministries will have to save €1.7 billion in 2013 and €1.5 billion in 2014. On July 27, the government announced that the Bank of Italy will also be forced to respect the same rigid measures.
The VAT tax won’t be raised until the next year.
The savings will help pay €6 billion for the Emilia earthquake emergency, and will allow access to the social security program for 55 thousand more “esodati” – workers over 50 years old who were pushed into early retirement with the promise that they would soon have access to social security pensions. Subsequently, the age at which one could access the social security pension was raised in another fiscal reform, leaving these workers unemployed and without the pensions they were to have had access to.
While some measures (such as the reduction in the number of the provinces) had long enjoyed public support, the decree as a whole attracted criticism from several parties and political groups. Rather than sensibly redesigning public expenditure, the Spending Review seems to decimate the public sector and the local governments (Regions, Provinces, and Municipalities). This will dramatically affect the quality of crucial services such as healthcare and education.
Giuseppe Castiglione, the president of the UPI (the national association of Italian provinces), denounced the program on July 23, saying that the proposed cuts to local boards will make it difficult to even start the next school year. He added that the proposed cuts (of €500 million for year 2013 and €1 billion for 2014) should be reduced to €176 million for 2013 and €532 million for 2014, in order to exclude services that are directly provided to residents.
The Italian union CGIL has expressed concerns for the dire consequences of the decree in the public sectors. Cutbacks on Municipalities, amounting to €2 billion, will make it difficult even to pay August’s wages, said Federico Bozzanca, head of the Public Service Sector- CGIL. Bozzanca also denounced the fact that the whole system of local service is facing collapse, should the proposed cutbacks go through.
Meanwhile, a national day of protest was launched on July 27, 2012, by two Italian unions representing public employees, CGIL (a left-wing union, which is also the biggest Italian union) and UIL (a right-wing, formerly socialist, union, cooperating with governments of various colors). The workers protested against Monti’s politics of austerity, affecting the quality of crucial public services such as education and healthcare, and asking for sacrifices, once again, from the working class. Marches and rallies were held in several Italian cities, including Milan and Rome.
The protest of the public employees closely follows several other protests launched in other sectors. On July 23, a day of mobilization of healthcare workers was organized by the aforementioned CGIL and UIL, together with the Catholic union CISL. Protest events were held in more than 100 cities across Italy. On July 26, the CGIL launched a day of protest for the so-called “esodati”, the workers left outside of the social security system by the recent reform of Minister Elsa Fornero (as a consequence 390,000 workers risk not receiving their retirement check). The CGIL has announced that more mobilizations and protests will come in the next months. A General Strike of the public sector has been called for September 28, 2012.
Opposition against the “spending review” is not only coming from labour and the public administration but also from non-policitized, or even downright conservative, sectors such as the pharmaceutical lobbies. On July 26 the day of protest was launched across the country by Federfarma, the national association of pharmacies; while in Genova 300 pharmacists also held a march. They were protesting against the rise in the pharmaceutical dues for the regions and the reduction of the pharmaceutical spending included in the decree. The government, however, cancelled some of these measures on July 25 under the pressure from the PDL and PD.
More info and sources in English, French, and Italian, available here.