ROME: The Italian government moved closer yesterday to scrapping a property tax which had threatened to split the fragile ruling coalition and deepen the political turmoil caused by former premier Silvio Berlusconi’s conviction for tax fraud.
Cabinet was set to pass a decree and settle an issue which has dogged Prime Minister Enrico Letta’s unwieldy coalition of traditional rivals ever since it was formed in the wake of February’s inconclusive elections. Berlusconi’s centre-right People of Freedom party has insisted that the IMU housing tax on principal residences must be abolished as a price for its support for the government, fuelling fears that failure to reach a deal could trigger a fresh political crisis. “Today IMU goes or Letta goes,” headlined the right-wing Libero newspaper, which is normally very close to Berlusconi.
Senior political leaders in Italy — the euro zone’s third biggest economy — have warned that any threat to the government’s survival would risk a return to the kind of market turmoil seen at the height of the bloc’s debt crisis.
Reuters
