Friday, August 30, 2013

Berlusconi’s party celebrates the abrogation of Imu (forgetting about the new “Service Tax”)

So, Berlusconi was sentenced to prison for tax fraud. Parliament has to vote concerning the possible loss of his senatorial title. The very survival of his party The People of Freedom is clearly linked to what will happen to the leader. Hence, we might expect both Berlusconi and his party to be on the edge of despair. Right?
Wrong. They are, in fact, celebrating a “victory” regarding the government’s decision to abolish a property tax, the “Imu”, introduced in 2011 by Monti’s technocrats.
This is a “victory” for Berlusconi because he actually based his whole electoral campaign on the absurd promise to cancel, and even to pay back, the Imu tax.  His party has been pressuring the government for months, threatening to withdraw their support, if they did not abolish the Imu. PM Enrico Letta finally gave in.

And we saw plenty of tweets, statements,  and any other sort of announcements celebrating the success of The People of Freedom’s pledge. Angelino Alfano, party’s secretary, tweeted: “Now the word “Imu” will disappear from dictionaries”.
What Berlusconi and his minions seem to have casually left out is the fact that the Imu is far from disappearing. What actually happened is that the government replaced Imu with a “Service Tax”. Imu was a property tax; the Service Tax, which will become law in 2014, is instead a tax levied by local authorities on the use of local services, as the name itself explains. The Democratic Party called it a “federal tax”, as the national government will not take blame if its revenue is not spent efficiently. Since this a tax not on property but on services, also tenants paying rent will be liable to pay for it.
But anyway, the fact that the actual word “Imu” will disappear is enough to claim victory for The People of Freedom.  And while they rejoice thinking of the votes they might win back, the government still has no idea about how to tackle the huge revenue gap (approximately €4bn) they are left with.

As the Financial Times accurately put it: “Il Cavaliere, as ever, has played clever politics. But while he may claim victory against rivals, Italy is once again the loser”. 

Friday, August 2, 2013

Berlusconi's prison sentence for tax fraud upheld by Italy's highest court

Yesterday the Corte di Cassazione, Italy's highest court, confirmed Berlusconi's prison sentence that last October found him guilty of tax evasion in the trade of TV rights by his company Mediaset.

Berlusconi in yesterday's video message

After a meeting that lasted about 7 hours, the court firstly ordered a further judicial review, that will have to be carried out by a minor court, on whether Berlusconi should be banned from public office. Banishment from public office  was in this case the so-called "additional penalty", which goes along with the prison terms and that will now be recalculated by another appeal court.
This initial announcement of postponement for what concerns Berlusconi's ability to remain in office momentarily caused a huge misunderstanding, which saw a bunch of Berlusconi's supporters celebrating outside the court, just as if he had been acquitted.
Then, the main pronouncement came, permanently confirming his sentence to 4 years in prison (automatically reduced to one year under a 2006 pardon law promulgated by the left coalition).
Later yesterday, Berlusconi appeared in a video statement where he criticised the court decision as "genuine judicial harassment that is unmatched in the civilised world".
Even if the sentence is now been confirmed in the later judicial stage, Berlusconi, who is 76, is unlikely to go to jail because of his age. He is likely to serve house arrest or to carry out community service.
We are now waiting to find out the consequences that this sentence will have on the government, in which Berlusconi's party is a main coalition partner.
Needless to say, everywhere else in the world Berlusconi would be thrown out by Parliament and even by his own party.  Unfortunately, this is not to be taken for granted in Italy, a country brainwashed by Berlusconi's fairytales of mean Communist magistrates persecuting the greatest statesman ever. In yesterday's message, the former PM claimed indeed that he would not "give up his fight for freedom".
Nevertheless, being this a definitive sentence, it is to become enforceable right away (we'll see how quickly). Berlusconi remains a Senator for now, but he will likely lose his well-known title of "Knight" ("Cavaliere") awarded by the Order of Merit for Labour.

Link to (part of) Berlusconi's video message: