Italy’s post-Berlusconi hangover

Ordinary Italians may well have woken today with a bit of a headache after last night’s celebrations over the departure of prime minister Berlusconi.

The unwelcome after-effects of that prosecco won’t have been attenuated by the news in this morning’s papers of the austerity measures that the Italian parliament passed hours before he threw in the towel. Here’s a flavour:

• 9.6 billion euros cuts to government departmental spending
• 200 million euros more for private schools
• 20 million euros more for private universities
• 70 million euros for private university health polyclinics
• 87 million euros cuts to funding for “voluntary” firefighters
• cuts to funds for the blind, mafia victims and people with TB
• cuts to anti-mafia investigators
• a two-year increase in the retirement age to 67 by 2026, by 2050 you’ll need to be 70 to retire on a full pension
• making it easier for public sector employers to fire staff
• “liberalisation” (read privatisation) of local public services

Of course, these measures are just an aperitif.

Amid continuing alarm that Italy can’t pay its debts and could be heading, with Greece, for a Eurozone exit, the new tecnocratic government of Super Mario Monti to be formed in the next few days will surely be preparing an even more poisonous austerity and privatisation brew for ordinary Italians.

“Monti is clearly in favor of quick implementation of labor-market reforms,” which “should help boost     Italy’s productivity and potential growth,” Annalisa Piazza, an economist at Newedge Group in London, said in an e-mailed note yesterday. He also backs a more efficient tax system that could reduce company and labor-market levies and increase the value- added tax, Piazza said. (Bloomberg, 12 Nov)

Stock up on those headache pills Italians. Your post-Berlusconi hangover is set to get a lot worse.