Italy's parliament approves economic package amid scepticism

Friday 08 August 2014 09.42
Italy's 'competitiveness decree' finally approved last night
Italy's 'competitiveness decree' finally approved last night

Italy's parliament gave final approval late last night to a package of support measures for the ailing economy, including a cut in energy costs for small companies and measures to spur lending to businesses. 

The package was dubbed the "competitiveness decree" when it was presented by Prime Minister Matteo Renzi's government in June.

But it got a lukewarm reception from business leaders who said it lacked a clear strategy and failed to address the real needs of industry. 

Renzi is under growing pressure to take more decisive steps to overhaul the euro zone's third-biggest economy after data this week showed it fell back into recession in the second quarter. 

The package underwent numerous changes during a difficult passage through parliament and finally passed by 155 votes to 27 in a confidence vote in the senate as the government tries to rush through legislation before the summer recess. 

Among the more significant measures in the decree are a reduction in energy costs for small and medium-sized companies, a tax credit for firms that make new investments in machiner yand new rules allowing insurers and credit funds to lend directly to business. 

Renzi's main economic stimulus approved so far has been an income tax cut of up to €80 a month for low earners, effective from May, while plans for a broad reform of rigid labour market rules have been put back to 2015 at the earliest. 

Prominent industrialist Alberto Bombassei, chairman of brake-maker Brembo, said the competitiveness decree contained too many minor measures and was of no help to business which would benefit far more from a reduction in corporate tax rates.