Every single line of the austerity bill passed urgently after diktat from the EU is being scrapped, of course justyfing such changes with new taxes which the day after are immediately withdrawn after the usual protest of the affected lobby.
Actually today every single line of the early August plan has been changed or removed, Italy is saying thanks to the ECB for purchasing its bonds and can renege on the promises made to the EU as condition for the bailout. Just wandering who will help Italy in September with bond purchases if the government is clearly a group of liars and crooks.
Of course the Italian government has been doing it stealthy convinced that no one abroad would notice what is called by them a simple correction.
Unfortunately for them Bloomberg has released an analysis titled "Berlusconi’s Backpedaling May Push Italy Back Toward The Brink of Disaster."
It is rather self-explanatory: as a reminder the ECB is only buying Italy bonds as part of its SMP monetization expansion due to promises that Italy would slash its deficit and implement austerity.
Italian Prime Minister Silvio Berlusconi may be steering his country back toward the eye of the sovereign debt- crisis storm as he tests the European Central Bank’s commitment to saving the Mediterranean country from a full-blown economic and financial crisis.
Berlusconi, responding to domestic opposition, said on Tuesday that a previously announced 45 billion euro austerity package, which may have swayed the European Central Bank to buy Italy’s government bonds, will be pruned. The new version will drop the “solidarity tax”, which would have taken an extra 5 percent or more of annual incomes exceeding 90,000 euros. In addition, cuts in funding to regional and local governments that totaled 9 billion euros in the original plan will be trimmed by about 2 billion euros. The Senate will vote on the revised plan next week. The reduction of the austerity package will probably leave the ECB’s Governing Council even less inclined to buy Italian government debt as it attempts to cut its overall level of bond purchases from the 22 billion euros acquired during the week ended Aug. 12, after the 10-year Italian sovereign yield reached 6.2 percent. The central bank had already reduced its weekly purchases to 14.3 billion euros during the period ended Aug. 9 and 6.7 billion euros last week.
The vigilantes are already reminding Berlusconi they are watching his every lie.
The spread between the 10-year yield of Italy’s government bonds and those of Germany rose by 11 basis points on Tuesday, as investors digested the latest amendments to the austerity package, and has increased by 30 basis points since the ECB completed the Aug. 12 round of purchases, its largest weekly intervention.
Italy can ill afford to test the ECB’s commitment as the country prepares for a serious test of its ability to continue accessing financial markets in September, when it will need to refinance 46 billion euros of maturing bonds. That is about six times the amount successfully raised by the Italian Treasury on Tuesday.