The EU urges Italy to make haste with reforms in competition law and the tax system, Brussels sees an ‘excessive macroeconomic imbalance’. The bottom line is that Italy’s public debt is too great. This was already significant, but due to the corona crisis, it had risen even further to more than 150 percent of the Gross National Product, and is not shrinking fast enough due to the current policy. Economic growth is too low for that.
The economists in Brussels want the Italian government to lower the tax burden on work and increase it on, for example, real estate. In Italy, the first owner-occupied home is in principle untaxed and there is no wealth tax. There is much opposition to this reform within Prime Minister Mario Draghi’s own government. “The EU wants to destroy us with taxes,” protested Matteo Salvini, leader of the League that is part of Draghi’s government.