ROME (MNI) – The government of Italy’s Prime Minister Mario Monti
has approved a hotly contested package of measures intended to help
boost economic growth by deregulating and increasing competition in a
number of sectors.

After securing passage late last year of E30 billion in spending
cuts and tax increases to address the country’s public deficit and debt
directly, the government now hopes to tackle fiscal problems from the
other side by getting the Eurozone’s third largest economy moving again.

Monti, who was appointed as interim prime minister last year to
replace ex-Premier Silvio Berlusconi, has said repeatedly that one of
the most important tasks of his government is to ensure that Italy will
no longer be a potential flashpoint for the Eurozone debt crisis.

The measures approved by his cabinet Friday evening include the
opening up of so-called “closed-professions” to promote more
competition, as well as the deregulation of services including energy
prices, taxis, notaries, and pharmacies. The package was introduced
after an eight-hour cabinet meeting. to competition.

New economic forecasts to be published next Tuesday by the
International Monetary Fund are expected to project a 2.2% contraction
of Italian GDP this year, Italian news agency Ansa reported on Thursday.

“The Italian economy has for decades now been hampered by three
main problems, those of inadequate competition, insufficient
infrastructure and too much bureaucracy,” Monti said at a press
conference Friday following the government meeting.

Today’s package includes measures that will permit a reduction in
the price of natural gas to the final consumer, the opening of retail
pharmacies to competition, the liberalization of the country’s gasoline
stations, and a decrease of the red tape involved in initiating public
works projects.

The government introduced a series of measures that will ease
access to and reduce the privileges of many so-called closed
professions, such as pharmacists and notaries.

Italy’s Antitrust Authority has in the past said that the opening
up of closed professions could generate an additional 1.5 percentage
points of economic growth per year over the next decade. Today’s
measures will permit the creation of some 5,000 new pharmacies and of an
additional 500 new notary seats in order to increase competition in
those sectors.

The government stripped local municipalities of the right to issue
taxi licenses, transferring that authority to a newly-created transport
agency.

The measures also include a plan to separate the Italian oil
company Eni Spa from its gas transport network, Snam, in an effort to
make the Italian gas market more competitive. Eni’s chief executive
Paolo Scaroni in December said the company was willing to sell its
52.54% share in Snam as long as it got “good value for the stake.”

Monti said the government would introduce further measures to cut
red tape and address the high cost of labour laws in Italy in the next
week.

Monti was appointed in November to spearhead a new Italian
government that faces the difficult task of preventing the default of
Europe’s third-largest economy after his predecessor Silvio Berlusconi
resigned.

In order to do so, he needs to revive economic growth and tackle
the country’s almost 2 trillion euro debt burden. He spent his first
month in office introducing the E30 billion austerity package, which is
aimed at taming Italy’s elevated borrowing costs.

Since then, he has announced plans to introduce growth-boosting
measures over the next months, including the ones unveiled today. His
actions are closely monitored by financial markets, since Italy may well
be the key to the euro’s survival. The country has the second-highest
debt ratio after Greece.

The measures approved Friday have generated considerable
controversy and social strife in Italy, which has suffered mass protests
by taxi drivers, truckers, fishermen and agricultural workers ahead of
the government’s announcement. The island of Sicily has been paralyzed
for five days as demonstrators block ports and roads. In addition,
gasoline station operators have threatened to call a 7-day strike in
response to the opening of their sector to competition.

The decree enacting the measures went into effect immediately after
the cabinet meeting, but the package must be approved by Parliament
within 60 days in order to remain in force.

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