The Full List of Monti Reforms: Which Have Been Really Implemented?

We restate here an older post. Thanks to our readers, we know now which Monti reforms have been really realized and which have got stuck.

Italian Prime Minister Mario Monti passed 30 billion euros ($40.3 billion) in tax hikes, 17 billion in pension and 13 billion in spending cuts  to shore up public finances, help economic growth and try to head off an acute debt crisis.

Two-thirds of the package aims to ensure Italy meets its goal of balancing the budget in 2013 despite a steep economic downturn and rapidly rising cost of borrowing. The remaining 10 billion euros will be used to stimulate growth over the next three years. It will also reform areas such as the pension system and professional services.

Sources were (if still available today):
I vostri soldi 
ABS CBN

Pensions

  • Rise of pension age to 66 in stages until 2020 (in 2014: 64 yrs. 6 months).  IMPLEMENTED
  • According to European Commission in 2020 Italians will be oldest to receive their pensions, on average 66 yrs, 11 months. It was 61 previously (by 2060 70 yrs. Versus 68 in UK, 67 in Germany, but life expectancy will still rise by 8 years in 2060).  IMPLEMENTED
  • Pension system change by 2012 from defined benefit (based on last salary) to defined contribution (based on money paid in): results in pension reduction of 15%. IMPLEMENTED
  • The annual inflation adjustment on pensions will be eliminated for those who collect monthly retirement checks of more than 936 euros. IMPLEMENTED
  • Early pension: The minimum number of contribution years will rise to 42 for men and 41 for women from 2012 on, from 40 years at present. IMPLEMENTED
  • The minimum retirement age for women’s seniority pensions was raised to 62, from 60 currently, with financial incentives to try to keep them working until 70. Men’s minimum retirement age will rise to 66, with incentives to work until 70. IMPLEMENTED
  • For women in the private sector, access to so-called “old-age” pensions will be accelerated. It will slowly be increased to 66 by 2018 from 60 today. Next year women in the private sector will need to be 62, instead of 60, to be eligible for an old age pension, which doesn’t take into account the number years worked, and men 66 instead of 65. IMPLEMENTED

 

source: Economiagratis

More liberal laws

  • Pharmacies, expected 5000 new pharmacies, expected benefit of 70 euros per family. STUCK
  • No liberalization for taxis, only review if quantities per town are correct. LIBERALIZATION GOT STUCK
  • No minimum and maximum tariffs for free professions, e.g. doctors, architects, lawyers, notaries, etc. Free price negotiation between professional and client. PARTLY: NO MINIMUM TARIFFS REALIZED
  • Slow liberalization and creation of new filling stations. WAITING FOR FINAL NORMS (DECRETI DI ATTUAZIONE)
  • No minimum surface and forced opening times for kiosks any more. ?
  • New form of “Limited”. Capital need: only 1€ capital for young people up to 35 years. YES (usually paid-in capital is available later, so this helps only businesses that do not have any capital at all. Will these kind of businesses be successful?) 
  • Quicker license for cinemas up to 3000 spectators (currently on hold).
  • More possibilities for opening shops on Sundays. YES
  • Companies investigated for tax issues, can continue to apply for public contests if they continue to pay taxes regularly. ?
  • More liberal when companies want to access special tax status. ?

Modernization and bureaucracy

  • Payment of traffic fines online. IMPLEMENTED
  • Electronic hospital cards. PROBABLY NOT
  • Domicile change to be done online (avoiding current queues). GOT STUCK !!
  • Public administration offices are measured. If not effective they may get fined. GOT STUCK 
  • Registration to university online. PROBABLY GOT STUCK
  • Bad votes in the studies currently lead to an automatic exclusion from public job competitions . This rule should be abolished. ?
  • Disabled people: less bureaucracy for getting permits. GOT STUCK
  • Pollution certification for companies easier. PROBABLY IMPLEMENTED
  • E-government:  online communication with government agencies from 2014. ?
  • Social card: identification card for most poor. IMPLEMENTED
  • Procedures to recover fiscal return when salary is less than 30K Euro eased. GOT STUCK
  • Antitrust: tries to give entry to independent distributers from the big oil companies. ?
  • Antitrust: train services get separated from rail services. GOT STUCK
  • Antitrust: Poste Italiane must give up monopoly, but operate bank Banco Posta. GOT STUCK

Taxes

  • Overall tax rate increases to 45% from 42.5%. IMPLEMENTED
  • Increase of VAT from 21% to 23% (reduced rate from 10% to 12%) from October 2012. POSTPONED TO JULY 2013 AND REDUCED to 22% and 11%. 
  • Increase of contribution of salaries: medium increase between 130 and 1700 Euro per person, for regions by 0.33%, increased medical deductions, local tax increases possible. IMPLEMENTED
  • Higher taxes on alcohol. GOT STUCK
  • Introduction of a modified version of a property tax that will bring in two-thirds — or more than 10 billion — of the total new taxes, said Deputy Economy Minister Vittorio Grilli when the package was presented.
    IMU WAS IMPLEMENTED STARTING 2012, 0,4% ON FIRST HOUSE, 0,76% ON COMMERCIAL PROPERTY, TAX BASE: “VALORE CATASTALE”, WHICH WAS REVIEWED UPWARDS; LOCAL TOWN ADM. MAY CHANGE RATE AND GETS PART OF THE TAX INCOME.
  • Taxes will be increased on luxury assets like boats longer than 10 m (30 ft), private airplanes and sports cars. YES, AS USUAL, MESSY AND INEFFECTIVE, SEE HERE AND HERE;      
  • A 1.5%, one-off tax on the money brought back to Italy with the so-called “tax shield” that gave amnesty to tax evaders who brought their foreign stashes back to Italy, which was passed by ex-Premier Silvio Berlusconi’s government.  IMPLEMENTED, SEE HERE
  •  A tax on bank accounts, stocks and financial instruments will be introduced.

Tax Fraud

  • Introduction of a tax compliance rating for Italian companies. GOT STUCK
  • Social assistance: economical status of receivers is continuously monitored and verified in order to avoid people receiving assistance they should not get. IMPLEMENTED
  • A ban on cash transactions above 1,000 euros, which is lower than the current 2,500-euro threshold. ?

More expenses

  • Cheap low-cost holidays for young people  NO
  • Lower taxes for people working in the poor southern part are extended 50% TAX BONUS ON LABOR COSTS FOR NEWLY HIRED WORKERS IN SOME CATEGORIES (OLDER THAN 50, NON GRADUATES, ETC.)

 Protection of consumers

  • Introduction of maximum costs for a current account at banks. NO IMPOSTA DI BOLLO FOR BANK DEPOSIT BELOW 5K EURO YEARLY AVERAGE; BANK ACCOUNT FREE OF CHARGE BUT NECESSARY FOR RETIRED PEOPLE GETTING A CHECK UNDER 1.500 EUR. 
  • Exclusion of liabilities inside contracts is not allowed any more, alignment with EU consumer rights. ?
  • Banks/Insurances have to present 2 different proposals for life insurance. YES; AT LEAST 3, ALL KIND OF INSURANCE
  • Unpaid account for poor pensioners. IMPLEMENTED
  • No obligation to hold account at bank when you get a mortgage. IMPLEMENTED
  • No obligation any more to deliver a quotation for liberal professions. ?
  • No fees for paying for fuel with credit cards. IMPLEMENTED

 

 

 

George Dorgan
George Dorgan (penname) predicted the end of the EUR/CHF peg at the CFA Society and at many occasions on SeekingAlpha.com and on this blog. Several Swiss and international financial advisors support the site. These firms aim to deliver independent advice from the often misleading mainstream of banks and asset managers. George is FinTech entrepreneur, financial author and alternative economist. He speak seven languages fluently.
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2 comments

  1. Jan

     Pensions

    Rise of pension age to 66 in stages until 2020 (in 2014: 64 yrs. 6 months).YESAccording to European Commission in 2020 Italians will be oldest to
    receive their pensions, on average 66 yrs, 11 months. It was 61
    previously (by 2060 70 yrs. Versus 68 in UK, 67 in Germany, but life
    expectancy will still rise by 8 years in 2060).YESPension system change by 2012 from defined benefit (based on last
    salary) to defined contribution (based on money paid in): results in
    pension reduction of 15%.YESThe annual inflation adjustment on pensions will be eliminated for
    those who collect monthly retirement checks of more than 936 euros.YESEarly pension: The minimum number of contribution years will rise to
    42 for men and 41 for women from 2012 on, from 40 years at present.YESThe minimum retirement age for women’s seniority pensions was raised
    to 62, from 60 currently, with financial incentives to try to keep them
    working until 70. Men’s minimum retirement age will rise to 66, with
    incentives to work until 70.YESFor women in the private sector, access to so-called “old-age”
    pensions will be accelerated. It will slowly be increased to 66 by 2018
    from 60 today. Next year women in the private sector will need to be 62,
    instead of 60, to be eligible for an old age pension, which doesn’t
    take into account the number years worked, and men 66 instead of 65.YES

     

    More liberal laws

    Pharmacies, expected 5000 new pharmacies, expected benefit of 70 euros per family.
    PROBABLY NOT
    No liberalization for taxis, only review if quantities per town are correct.
    YES
    No minimum and maximum tariffs for free professions, e.g. doctors,
    architects, lawyers, notaries, etc. Free price negotiation between
    professional and client.
    NO
    Slow liberalization and creation of new filling stations.
    NO
    No minimum surface and forced opening times for kiosks any more.
    DON’T KNOW
    New form of “Limited”. Capital need: only 1€ capital for young people up to 35 years.
    YES
    Quicker license for cinemas up to 3000 spectators (currently on hold).
    DON’T KNOW
    More possibilities for opening shops on Sundays.
    YES
    Companies investigated for tax issues, can continue to apply for public contests if they continue to pay taxes regularly.
    DON’T KNOW
    More liberal when companies want to access special tax status.
    DON’T KNOW

    Modernization and bureaucracy

    Payment of traffic fines online.YESElectronic hospital cards.PROBABLY NOTDomicile change to be done online (avoiding current queues).NOPublic administration offices are measured. If not effective they may get fined.NORegistration to university online.PROBABLY NOTNo exclusion from public job competitions if one has bad votes in study.DON’T KNOWDisabled people: less bureaucracy for getting permits.ABSOLUTELY NOTPollution certification for companies easier.PROBABLY YESE-government:  online communication with government agencies from 2014.DON’T KNOWSocial card: identification card for most poor.YESProcedures to recover fiscal return when salary is less than 30K Euro eased.NOAntitrust: tries to give entry to independent distributers from the big oil companies.DON’T KNOWAntitrust: train services get separated from rail services.NOAntitrust: Poste Italiane must give up monopoly, but operate bank Banco Posta.NO

    Taxes

    Overall tax rate increases to 45% from 42.5%.
    DON’T KNOW
    Increase of VAT from 21% to 23% (reduced rate from 10% to 12%) from October 2012.
    NO
    Increase of contribution of salaries: medium increase between 130
    and 1700 Euro per person, for regions by 0.33%, increased medical
    deductions, local tax increases possible.
    NO
    Higher taxes on alcohol.
    DON’T KNOW
    Introduction of a modified version of a property tax that will bring
    in two-thirds — or more than 10 billion — of the total new taxes, said
    Deputy Economy Minister Vittorio Grilli when the package was presented.
    DON’T KNOW
    Taxes will be increased on luxury assets like boats longer than 10 m (30 ft), private airplanes and sports cars.
    DON’T KNOW
    A 1.5%, one-off tax on the money brought back to Italy with the
    so-called “tax shield” that gave amnesty to tax evaders who brought
    their foreign stashes back to Italy, which was passed by ex-Premier
    Silvio Berlusconi’s government.
    DON’T KNOW
     A tax on bank accounts, stocks and financial instruments will be introduced.
    PROBABLY YEW

    Tax Fraud

    Introduction of a tax compliance rating for Italian companies.NOSocial assistance: economical status of receivers is continuously
    monitored and verified in order to avoid people receiving assistance
    they should not get.YESA ban on cash transactions above 1,000 euros, which is lower than the current 2,500-euro threshold.DON’T KNOW

    More expenses
    Cheap low-cost holidays for young people
    NO
    Lower taxes for people working in the poor southern part are extended
    DON’T KNOW

    Protection of consumers

    Introduction of maximum costs for a current account at banks.DON’T KNOWExclusion of liabilities inside contracts is not allowed any more, alignment with EU consumer rights.DON’T KNOWBanks/Insurances have to present 2 different proposals for life insurance.DON’T KNOWUnpaid account for poor pensioners.DON’T KNOWNo obligation to hold account at bank when you get a mortgage.DON’T KNOWNo obligation any more to deliver a quotation for liberal professions.DON’T KNOWNo fees for paying for fuel with credit cards.DON’T KNOW

    1. DorganG

      Thanks Jan, you can see that I entered your comments.

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