During 2005, According to ITYPETRAVEL, the Council of the European Union ascertained with regard to the Italy the emergence of an excessive deficit situation, requiring national authorities to adopt an adequate fiscal consolidation policy. The Prodi government, which took office in 2006, therefore launched a budget maneuver with spending cuts, concerning, among other things, the consumption of central administrations, transfers to businesses, disbursements to local authorities and health expenditure, and interventions on the revenue side, such as the widening of the tax base and the tightening of the fight against tax evasion and avoidance. With regard to health expenditure, regulatory measures were adopted to discourage the formation of imbalances in regional health budgets. On the financial market, National Commission for Companies and the Stock Exchange). In recent years, the opening of the internal market to competition in various economic sectors has also been promoted: in particular, some regulatory constraints on the access and conduct of operators have been removed, greater consumer protection has been guaranteed and the power of Antitrust. During 2007, in the face of some tax tightening regulations including the increase in social contributions for self-employed and atypical workers, the increase in the progressivity of the levy on the income of individuals to promote social equity, the strengthening of the local tax system and the increase in the tax rate on financial income, the competent authorities intervened on the labor market by introducing tax reliefs to reduce the tax wedge.
In particular, tax deductions were introduced, incentives were paid on purchases and the municipal tax on most of the main homes was repealed. Industrial policy has promoted the competitiveness of Italian companies with tax concessions aimed at reducing production costs and encouraging investments and business growth. In support of banks and other financial institutions exposed to market volatility, the government intervened with measures aimed at strengthening their recapitalization and in 2010 issued regulations on the transparency of banking and financial operations and services to protect customers and promotion of competition. On the labor market, the authorities have extended access to social safety nets to people who are usually excluded.
At the beginning of the decade, the reform of fiscal federalism was launched, characterized by the transition from a derivative finance fed by permanent and general transfers of the central state, to an autonomous finance with forms of income typical of local administrations. This intervention, divided into a delegated law and subsequent implementing decrees governing the financial autonomy of local authorities, was intended to promote the involvement of entities in the process of consolidating public accounts, bringing tax administrations closer to taxpayers and to the beneficiaries of local services, and at the same time rationalize the complex tax system. In the same period, further economic policy interventions were carried out to contain State exits: the freezing of the salaries of public employees for the three-year period 2010-12, the reduction of the higher ones, the adoption of measures to combat inefficiencies in the public sector. In this period, the social security system was also subject to measures aimed, in particular, at a progressive increase in the retirement age in line with the lengthening of life expectancy. The Monti government, which took office at the end of 2011, has adopted various economic policy measures aimed at addressing the worsening growth prospects and serious tensions on the sovereign debt markets. On the revenue side, the new administration has increased taxation on real estate with the Save Italy decree with the extension of the tax base to the first home, increased the rates of other forms of taxation, including, starting from 2011, the ordinary rate of VAT, and introduced some reductions in favor of production activities with the aim of strengthening the capital structure of companies. On the expenditure side, the main savings concerned the decline in transfers to local authorities and the complex reform of the social security system, with the gradual transition from a salary system to a contributory system. The government has also given impetus to the spending review process with the appointment of an extraordinary commissioner who has been entrusted with the task of rationalizing the purchases of goods and services by public administrations. Other important measures for the liberalization of local public services.
In 2014, with the inauguration of the Renzi government, a new impetus was given to economic policy to cope with the worsening macroeconomic prospects and stimulate the economy through fiscal measures, partly temporary, and structural measures. The main interventions include the simplification of the legislation relating to fixed-term contracts and apprenticeships, the allocation of resources to accelerate the payment of commercial debts of public administrations, support for the disposable income of the weakest groups of employees with the ” disbursement of a bonus, the reduction of the tax wedge pursued with tax relief, the law delegating the reform of the labor market with the so-called Jobs act which introduces the employment contract with increasing protections in relation to length of service and modifies the conditions for reintegration of dismissed workers. With regard to the tax system, in 2014 corporate taxation was also reduced and the enabling law for reform was passed for the simplification of tax rules and the guarantee of greater stability and legal certainty.
