Italy par­ties to fund them­selves

Weekend Argus (Saturday Edition) - - WORLD -

ROME: Italy’s cab­i­net passed an emer­gency de­cree yes­ter­day to phase out state fi­nanc­ing of po­lit­i­cal par­ties in re­sponse to pub­lic anger over the cost of the coun­try’s elec­toral ap­pa­ra­tus.

Leg­is­la­tion to abol­ish state fund­ing was pre­sented by prime min­is­ter En­rico Letta’s gov­ern­ment in May, but the bill got bogged down in par­lia­men­tary bick­er­ing. The de­cree, which must be ap­proved by par­lia­ment within 60 days or it will ex­pire, re­it­er­ates the orig­i­nal pro­posal to grad­u­ally re­place the cur­rent sys­tem with fi­nanc­ing by pri­vate cit­i­zens by 2017.

The pop­u­lar­ity of Italy’s po­lit­i­cal par­ties has been eroded by decades of waste­ful spend­ing and cor­rup­tion. The plan to stop fund­ing them with tax­pay­ers’ money has wide sup­port.

The de­ci­sion to give the plan another push is prob­a­bly tied to this week’s elec­tion of Florence’s mayor Mat­teo Renzi as the new leader of Letta’s Demo­cratic Party (PD) in a pri­mary vote.

Renzi’s rise in pop­u­lar­ity over the past two years has been linked to his sting­ing crit­i­cism of the old PD lead­er­ship and its de­pen­dence on pub­lic fund­ing.

A ref­er­en­dum to scrap party fi­nanc­ing was over­whelm­ingly passed in 1993, but its out­come was sub­stan­tially ig­nored. The pre­vi­ous form of di­rect fi­nanc­ing was re­placed with gen­er­ous re­im­burse­ments of money par­ties spent in elec­tion cam­paigns.

The planned abo­li­tion will re­duce cur­rent pub­lic fi­nanc­ing by 40 per­cent in the first year af­ter the law is passed, 50 per­cent in the sec­ond year and 60 per­cent in the third. State fi­nanc­ing would be fully phased out in the fourth year. Un­der the new sys­tem, cit­i­zens who choose to give money to po­lit­i­cal par­ties would be able to deduct the pay­ments from their taxes.

Cut­ting state fund­ing was a sig­na­ture pol­icy pro­posal of the anti-es­tab­lish­ment 5-Star Move­ment, which won a quar­ter of the votes at Fe­bru­ary’s na­tional elec­tion and ac­cepts no such con­tri­bu­tions. Letta said the gov­ern­ment’s de­cree showed he was keep­ing his prom­ise, but 5-Star Move­ment leader Beppe Grillo dis­missed it as “yet another joke”. He said if the tra­di­tional par­ties re­ally wanted to re­nounce pub­lic fund­ing they sim­ply needed to fol­low 5-Star’s ex­am­ple.

The cab­i­net also ap­proved a se­ries of mea­sures aimed at help­ing the econ­omy, which has been shrink­ing for the last two years.

Th­ese in­cluded fis­cal in­cen­tives for com­pa­nies to in­vest in re­search and in­no­va­tion, and steps to help com­pa­nies raise funds through cor­po­rate bonds as an al­ter­na­tive to scarce bank credit. – Reuters

‘IT’S A JOKE’: Beppe Grillo

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