Politicians avoid austerity, Italy enraged

AP News
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Posted: Jul 21, 2011 6:23 AM
Politicians avoid austerity, Italy enraged

Millions of Italians face tough sacrifices from an austerity package passed last week to stave off a financial crisis. But the country's rulers don't seem prepared to abandon La Dolce Vita.

The euro70 billion ($100 billion) package does not entail any significant reduction in the wages, perks and privileges of Italy's notoriously bloated, handsomely paid political elite, despite repeated promises such cuts would be carried out.

In fact, some measures that would have made politicians suffer were watered down in a last-minute, nighttime meeting of lawmakers.

Premier Silvio Berlusconi's flamboyant ways have grabbed most of the headlines, but Italians have long grumbled about the state-subsidized luxury lifestyles of their politicians. Now, at a time of belt-tightening, these privileges strike people as particularly odious.

"The increasing indifference of the political class to the country's problems is infuriating to people," said Sergio Rizzo, co-author of a hugely successful book called "The Caste," which exposed greed and corruption in the halls of power. "It is as if our politicians had reversed the order of priorities: first their own business, then ours."

A Facebook page called "The Secrets of the Caste of Montecitorio" _ after the name of the building housing parliament's lower house _ has drawn over 340,000 "likes" in just a few of days. Its author is anonymous, calls himself Spider Truman and is a self-described disgruntled former aide to an Italian lawmaker.

Influential Catholic magazine Famiglia Cristiana weighed in this week, lamenting that the political class was administering "bitter medicine" to the country but not to itself. "Politicians are not giving up one euro," it said.

Faced with the popular outrage, politicians of all stripes are now promising action. A minister in Berlusconi's government has proposed an ambitious constitutional reform, but that would take years to pass. The speakers of both houses of parliament have devised packages of cuts and promised swift implementation.

But similar promises in the past have gone unfulfilled.

"I'm not confident. They've said it many times before, they've never done it," said Franco Ferrari, a 67-year-old pensioner, speaking just outside parliament. "They have cut the pensions to poor people ... myself among them, while they keep up these privileges."

According to a recent study by the labor union UIL, some euro24.7 billion (about $35 billion) go every year into funding the political machine, which employs, directly or indirectly, some 1.3 million people. That means each Italian taxpayer contributes euro646 annually (about $910) to a system widely seen as failing the nation.

Lawmakers in the 630-member lower house of parliament make euro11,700 ($16,500) per month before taxes, plus some euro7,200 ($10,000) more to cover expenses or pay aides. Most of those expenses go largely unchecked, leaving the lawmakers free, for example, to pocket money intended for an aide. Plus they have free travel within Italy, be it by highway, plane or train, among other perks, and a generous pension system.

The overall compensation is not all that different from what lawmakers make in some of the biggest EU states. In France for example, the 577 deputies of the Assemblee Nationale earn euro7,100 ($10,000) pretax, but also have euro6,400 ($9,000) for other expenses, and funds of up to euro9,000 ($12,700) to pay aides.

What is enraging Italians is the perceived marriage of incompetent leadership with corruption and abuse of office. The country has been sickened by tales of state planes shuttling lawmakers to football matches, fancy restaurant lunches for which the taxpayer picks up the tab, inside access to luxurious real estate below market-price, or paid for by friends.

"We are not outraged because somebody, even a politician, makes a lot of money, but because there is no corresponding service provided to the community," said Rizzo.

To many critics, Berlusconi is the most egregious example of a political class intent on perpetuating its power rather than serving citizens. The Italian leader has passed measures critics say were meant to protect his business interests or safeguard him from prosecution in legal cases.

But corruption probes and books like "The Caste" _ written by Rizzo and Gian Antonio Stella, both reporters at Corriere della Sera _ suggest a greedy political machine at all levels. Recent investigations have targeted a former aide to the finance minister, who allegedly sought favors and presents from an industrialist, including a Ferrari. In another case, a Cabinet minister is under investigation for alleged Mafia ties.

There have been some small cuts in recent years. But, unlike everything else in Italian politics, resistance to significant reform has been bipartisan. For years, governments of all colors have promised to scrap local provincial administrations, both to save money and eliminate what is seen as a redundant body. But the provinces have not been touched.

Giulio Tremonti, the finance minister who devised the austerity plan, had warned his colleagues that politicians had to set the example if they were to be credible in demanding sacrifices of ordinary Italians.

The package originally did include measures to cut salaries, the number of chauffeured cars and other benefits, news reports said. But a group of lawmakers met between July 12-13 _ just before parliamentary approval _ and slashed the most significant reductions, saying the prestige of parliament needed to be safeguarded.

For example, chauffeured cars _ currently 15,000 according to some estimates _ were not reduced. Rather, it was decided that future cars should have smaller engines, according to newspaper La Repubblica.

For ordinary Italians, the austerity measures include increases in health care fees, cuts to tax breaks and high-end pensions, raises to the retirement age and public-sector salary freezes. The measures were rushed through parliament last week amid market jitters over Italy's financial stability. Some of these measures have already taken effect.

Debate over political privileges threatens to spill into a wider anger over how Italy's governed, says Rizzo.

"When the legitimacy of a political class to govern is called into question, then the very democratic system is called into question," he said. "It is a very dangerous fracture that can lead to any kind of reaction."

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Associated Press Writer Sylvie Corbet in Paris contributed to this report.