Ignazio Visco: Fact-finding with regard to the decree law containing
urgent measures for growth, equity and the consolidation of the public
finances
Testimony of Mr Ignazio Visco, Governor of the Bank of Italy, at the Joint Session of the
Fifth Committees of the Italian Senate and Chamber of Deputies, Rome, 9 December 2011.
* * *
The sovereign debt crises in the euro area call for robust, rapid and courageous responses
at the national, European and global levels. In Italy tensions have worsened since the
summer, with alarming repercussions on the spread between Italian and German
government bonds. The Government's decree law which supplements the measures passed
in July and August, is a necessary and urgent step to re-establish the creditworthiness of the
Italian state and avoid extremely serious and lasting consequences for the real economy.
The measures, which aim to achieve budgetary balance in 2013, determine an adjustment
on the order of €20 billion annually for each of the next three years. Taking the measures
adopted in the summer into account, the adjustment in 2013 is equal to €76 billion. About two
thirds of the new measures are on the revenue side, pushing the ratio of taxes and social
security contributions to GDP up to around 45 per cent. The procedures for implementing the
safeguard clause linked to the enabling law for tax and welfare reform are defined.
The measures on government spending mostly affect pensions, completing the long process
of reform serving to bring our system into line with the changed socio-demographic and
economic growth prospects. Partly as a result of the adjustments made in the summer,
primary spending falls in nominal terms. The only way to increase its efficiency is by
systematically evaluating individual spending items.
Firm action against tax evasion remains a priority. The tax base brought to light and the
resources released following the rationalization of spending, will make it possible to achieve
the reduction in the tax burden needed to give greater stimulus to enterprise and
employment.
The budgetary provisions contained in the decree will cause GDP to decline by an estimated
half a percentage point in the next two years. The impact could be largely offset if the fall in
the yield on Italian 10-year bonds seen in the days immediately following the promulgation of
the decree were to be confirmed and extend across the entire range of maturities.
The effort to ensure a return to higher growth rates, an improvement in firms'
competitiveness and the creation of more jobs must be intensified, by rapidly implementing
effective measures supplementing those already defined in the Government decree, in an
allembracing framework to provide lasting reassurance to those who have invested and are
investing in our State, in our country.
1. The decree law of 6 December 2011
The decree law reduces net borrowing by €20.2 billion in 2012, €21.3 billion in 2013 and
€21.4 billion in 2014. In relation to GDP, the adjustment is equal to 1.3 percentage points in
each year. The measures are in addition to those approved during the summer and those
introduced by the 2012 Stability Law, which provided for a reduction in the budget deficit of
€28.6 billion in 2012, €54.4 billion in 2013 and €59.9 billion in 2014. In total, the measures
should reduce net borrowing by about 3 percentage points of GDP in 2012 and by more than
4.5 points on average in the two years 2013-14.1
A large part of the correction involves revenue, with effects that decline over the three-year
period (from €17.9 billion in 2012 to €12.1 billion in 2014). On the spending side the
adjustment, which rises from €2.3 billion in 2012 to €9.3 billion in 2014, is mainly due to the
measures relating to pensions.
Over the three years, the measures generate resources totaling €32.3 billion in 2012,
€35.1 billion in 2013 and €37.1 billion in 2014. In part these amounts are used for tax relief
(€3.6, €7.3 and €8.4 billion respectively), for extra expenditure (€4.6 billion in 2012 and
€3.6 billion in 2013 and 2014) and to reduce the resources to be raised with the
implementation of the enabling law on tax and welfare reform (€4.0 billion in 2012,
€2.9 billion in 2013 and €3.6 billion in 2014).
In particular, the decree eliminates the doubts about the effects of the enabling law
(€4.0 billion in 2012, €16 billion in 2013 and €20 billion in 2014) and the procedures for
implementing the relative safeguard clause. Part of the resources in relation to 2012
(€3.3 billion of the aforementioned €4.0 billion) derives from the increase of two percentage
points in the reduced and standard VAT rates (to 12 per cent and 23 per cent respectively)
from next October. The safeguard clause has been redefined: the previously mentioned
increase in VAT rates will become permanent and will be followed by a further increase in the
rates of half a percentage point in 2014 if provisions have not come into force by September
2012 to implement the enabling law or if modifications are not made to the tax exemption and
subsidy systems producing €13.1 billion of additional revenue in 2013 and €16.4 billion in
2014.
With the aim of encouraging competition, the decree law also provides for liberalization
measures in some sectors (retail outlets, pharmacies and transport), measures to increase
the powers of the Antitrust Authority (AGCM), and others to simplify the procedures and
reduce the time taken to build infrastructure.
2. An overall evaluation
The sharp deterioration in growth prospects in recent months and the drastic worsening of
state funding conditions mean that last summer's corrective measures, although important,
are now insufficient to respect the commitment made at European level to achieve a
balanced budget in 2013. There was a further increase in the spread between Italian and
German 10-year bonds which, in the second week of November, peaked at 575 basis points.
Additional measures were therefore urgently needed to consolidate the budget and even
more resolute action to address the structural problems of Italy's economy.
The packages passed in July, August and December show Italy's determination to achieve a
permanent adjustment of its public finances; they make it possible to achieve the objectives
announced: a balanced budget in 2013 remains the fixed objective for fiscal policy.
The size of the austerity package presented on 6 December is intended to reassure the
markets; it is larger than what would have been necessary in the less troubled times of a few
months ago. The measures have effects which are permanent and, in particular with
reference to pensions, increasing over time. The contribution of one-off measures to the
adjustment is small.
Pension reform, by setting more stringent requirements for retirement, immediately
strengthens the financial sustainability of the pension system. The measures, whose costs in
terms of reducing spending power and frustrating individual expectations cannot be
concealed, virtually complete the long phase of adjusting the system to the changed
sociodemographic situation and economic growth prospects. The extension of the
contributionsbased system to all workers reduces disparity in treatment and links the benefits received
more closely to the contributions paid in, thereby reducing distortions in the supply of labour.
The challenge now is to provide older workers with satisfactory job opportunities and offer
younger ones regular careers that produce sufficient cumulative pension contributions. It is
essential, therefore, to adapt the labour market rules, revise unemployment and welfare
benefits, and reinforce private pension funds.
Given the need to lower net borrowing very quickly, the correction relies largely on revenue
increases. This will result in a further rise in total taxes and social contributions to about
45 per cent of GDP, very high by both historical and international standards.
The composition of tax revenue has been somewhat modified in order to sustain economic
activity and enhance competitiveness. Some tax relief is granted to firms for the purpose of
strengthening their capital bases and reducing labour costs, thus helping to boost
employment.
Above all, levies on assets and consumption are increased. The stepped-up taxation of real
estate is consistent with government decentralization, because it tightens the direct link
between taxes paid and public services. Instituting ordinary forms of taxation of total wealth,
as in other countries and also with a view to reducing income tax, requires the preparation of
adequate means of acquiring information.
A contribution to achieving the public finance targets is to come from a strict curb on primary
expenditure, which should be €4 billion less in 2013 than in 2010, requiring a significant
reduction in real terms. Only if appropriate mechanisms for detailed, item-by-item analysis of
spending and accurate indicators of the efficiency of public structures (offices, schools,
hospitals and courts) are put in place can the adequacy of the appropriation for each item be
assessed independently of the amount of past spending. Resolute action along these lines
while proceeding with cost containment and reduction for public agencies and governmental
institutions can help in the medium run to free resources for reducing the tax burden.
On 30 November the Chamber of Deputies approved on first reading a constitutional
amendment requiring a balanced general government budget. A rule of this sort can help to
maintain the budgetary balance set to be reached in 2013. In the past, the accomplishments
of sharp fiscal adjustments have been eroded in the years that followed.
Some measures are designed for more effective action against tax evasion, which is Italy's
most serious obstacle to the fair sharing of the fiscal burden. It is essential to continue along
these lines, in particular by enhancing the effectiveness of administrative action. Among
other things, shrinking the area of tax evasion facilitates the design of programmes for
lowincome citizens, for which it is essential to have reliable information on the real economic
situation of households. Looking ahead, this could make it possible to ease the concentration
of the tax burden and step up incentives for labour and enterprise. The tax wedge on labour
income in Italy is 5.5 percentage points higher than the euro-area average. The official tax
rate on corporate income, even excluding the regional tax on productive activity, is more than
4 points higher.
In the medium term significant tax cuts must be accompanied by curbs on spending. If gains
on this front were made more rapidly, there could be an attenuation of the rise in VAT rates
provided for in case of failure to implement the tax and welfare enabling act, in particular the
projected rise on items currently subject to the reduced rate of 10 per cent, which would have
the most strongly regressive effect on income distribution.
With a view to stimulating a return to faster economic growth, the structural measures
contained in the decree remove some constraints and restrictions on competition and
business activity and will simplify and accelerate the realization of infrastructure projects.
The liberalization of pharmacies, retailing and transport resumes the reform processes
initiated in the second half of the last decade. Powers of regulation and monitoring are
assigned to independent authorities (which will incorporate today's existing agencies) in the
sectors of water management and postal services. This is a course already given significant
impulse by the measures taken during the summer concerning professional services and
local public services; it must be resolutely pursued with effective implementation of the
measures already enacted.
Further reforms will be needed to make the set of structural actions consistent and
comprehensive, with priorities being established and account taken of Italy's standing in the
most common international rankings, in order to improve the perception of the country
system by foreign investors as well.
The Government's decision not to intervene immediately, in the decree, on issues involving
employment relations and unemployment and welfare benefits will make it possible to hear
the views of labour and employer organizations. Nevertheless, action on these matters is
urgent, in particular to provide for easier and more secure access to the job market for young
people and ensure that they can achieve economic advancement that is not ephemeral.
Welfare reform should form part of an overall vision of social protection guided by the
principle of universality. This means, among other things, combining the income support
programmes for workers who lose their jobs with active policies of retraining and
occupational reintegration.
3. The outlook
Over the past few months the outlook for growth in the euro area has deteriorated steadily.
Cyclical indicators point to a further slackening of economic activity in the fourth quarter from
the already low rates of growth registered in the central part of the year. The Eurosystem
projections released yesterday, which are basically in line with the latest estimates of the
main international organizations and leading private forecasters, are for modest GDP growth
in 2012, held back on the one hand by the slowdown in world trade and less expansive
budgetary policies and on the other by the sovereign debt strains and the heightened risk
aversion of economic agents.
Against this backdrop, economic activity in Italy is subject to additional factors of fragility,
connected above all with the large public debt; these will be reflected in a contraction of GDP
in 2012 and very slow growth in 2013. The worsening of the growth outlook since last
summer's forecasts reflects the measures for the adjustment of the public finances enacted
in recent months and the exceptional widening of the spread vis-à-vis German government
bonds, which is being passed through to the cost of finance to the private sector and the
spending plans of households and firms, thereby diminishing the domestic component of
aggregate demand. A further tightening of credit supply terms could follow if banks continue
to encounter funding difficulties on wholesale markets.
The macroeconomic picture for the next few quarters is marked by extraordinarily great
uncertainty, provoked mainly by the euro-area public debt crisis. If the yield spreads on
government bonds were to remain very wide for a long time, this would further undermine the
outlook for growth and constitute an obstacle to the planned adjustment of the public
finances. Restoring confidence is essential to sustain growth.
Other things being equal, the budget measures contained in the decree, which are
indispensable to avert still worse scenarios, will inevitably have a negative impact on
economic activity. Going by the historical pattern, the impact of the additional measures on
GDP can be estimated as amounting to about half a percentage point over the next two
years.
However, this restrictive effect may be countered by the positive effects of increased
confidence in Italy's ability to honour its debt and improving medium-term prospects for
economic growth. A reduction in the cost of finance to the public sector and to households
and firms could favour growth in the immediate. The initial impact of the Government's
measures is indicative: the day after the announcement of the package the yield on ten-year
bonds came down by 80 basis points. A reduction of that amount, if it were permanent and
extended to the entire yield curve, would largely compensate for the restrictive effects of the
budget package.
The Government has also introduced measures to sustain economic growth, such as a tax
allowance for corporate equity, the deductibility of the portion of IRAP relating to labour
costs, provisions to foster competition and measures for infrastructure investment. Action
must proceed with wide-ranging measures that gradually bring the economy up to a higher
and better balanced growth path.
It is crucial to establish a clear and credible comprehensive framework within which to place
individual measures. This programme must comprise both the measures already specified
and those to be designed starting today. It must apply both to the measures that can be
taken in the short term and to those that will require more time. A comprehensive approach
to the design of pro-growth measures can bolster confidence in the prospects for our
economy, with beneficial effects on investment and the cost of the public debt.
The measures - as we know - must aim to reduce administrative costs and the length of
judicial proceedings; improve the efficacy of regulation and stimulate competition; raise the
quality of public services and obtain better terms for infrastructure projects, including by
means of resolute action on the legality front; they must also remove the obstacles to the
growth of firms' size, enhance the formation of human capital, facilitate innovation and
improve the working of the labour market.
Appendix:
Summary of the decree law's main provisions
A.1 Measures that increase revenue
The decree produces increased revenue of €25.5 billion in 2012, €24.6 billion in 2013 and
€24.1 billion in 2014. Most of the increase comes from the taxation of real estate and excise
duties. Other measures increase the taxation of assets other than real estate. Further
provisions are designed to strengthen the fight against tax evasion.
Taxation of real estate. - The decree brings forward the entry into force of the own
municipal tax (IMP), instituted by the legislative decree on municipal federalism, from 2014 to
2012 and modifies the related tax base significantly. The latter now includes first homes and
is calculated by applying higher adjustment factors to upwardly revised cadastral income
than those previously in force for the municipal property tax (ICI), especially for residential
buildings.
As already provided by the March legislative decree for the implementation of municipal
federalism, the new tax supersedes ICI and personal income tax (plus the related surtaxes)
on imputed income from non-leased property (second homes). The basic IMP rate is
confirmed at 0.76 per cent, except for first homes and rural buildings for instrumental use, to
which reduced rates of respectively 0.4 and 0.2 per cent apply. For first homes there is a tax
credit of €200. Municipalities may raise or lower the basic rate by 0.3 percentage points and
the rate on first homes by 0.2 points. They may also raise the tax credit up to the amount of
the tax due, but in this case they may not increase the ordinary rate for houses available for
use by the owner.
The central government is reserved half of the receipts from buildings other than first homes
and rural buildings for instrumental use, determined by applying the basic rate; that share is
officially estimated at €9 billion. The increase in municipal revenues deriving from the
introduction of IMP (€2 billion according to the official estimates) is offset by a reduction in
central government transfers to municipalities.
Going forward, the revision of cadastral values needs to be accelerated. According to the
Revenue Agency's latest estimates, the overall market value of the stock of housing is much
higher than its taxable value; the discrepancy increases with the real-estate wealth of the
owners; it also varies greatly according to the exact urban location and age of the building.
Updating cadastral values would permit a rebalancing of these distributive aspects while
keeping receipts unchanged.
Regional personal income surtax. - The decree law has raised the basic rate of the
regional personal income surtax from 0.93 to 1.23 per cent with effect from the 2011 tax
year. According to the official estimates, this will produce additional revenue of €2.2 billion
from 2012 onwards, offset in regional budgets by the reduction in central government
transfers to finance health care.
Excise duties. - The decree provides for an immediate increase in the excise duties on
petrol, diesel oil, LPG and methane for use as fuels, with the additional revenue estimated at
€5.9 billion per year (including the secondary effects on value-added tax); the receipts from
the above excise duties are put at more than €30 billion. The impact of these increases on
consumer price inflation in 2012 will be on the order of 0.2 percentage points.
Taxation of assets other than real estate. - The decree law rationalizes the measure
introduced with the first budget correction during the summer regarding the stamp duty on
securities accounts by extending the tax to apply to financial products not held in securities
accounts, except for pension funds and health funds. The tax levied as a fixed amount for
different securities value brackets is replaced by a proportional levy of 0.1 per cent in 2012
and 0.15 per cent thereafter. A minimum of €34.20 and maximum of €1,200 are set for the
amount of tax payable. Lastly, where possible the securities are to be calculated at market
rather than face value. According to the official estimates, the additional revenue with respect
to the stamp duty enacted during the summer should be €1 billion a year in the next two
years and €0.5 billion a year thereafter.
The decree also establishes a one-off 1.5 per cent levy on assets repatriated or disclosed
under the favourable tax measures introduced in 2001 and 2009, with the proceeds
estimated at €1.1 billion in 2012 and in 2013.
A series of provisions increase the taxes on the ownership and use of luxury goods such as
large cars, boats and airplanes. They will yield additional revenue of €0.4 billion.
Measures against tax evasion. - The decree attacks tax evasion by reducing the ceiling for
cash transactions from €2,500 to €1,000. A further reduction would be desirable and should
be accompanied by a reduction in the costs of using electronic money. In addition, to foster
the emergence of tax bases, some benefits are introduced from 2013 onwards for natural
persons, partnerships and taxpayers subject to sector studies adopting transparent courses
of conduct in tax matters.
Checks conducted by the Revenue Agency and the Finance Police on the basis of specific
analyses of the risk of evasion are to be strengthened. Accordingly, from 2012 onwards
banks and other financial intermediaries will be required to transmit the data on financial
movements on customers' accounts to the authorities for the purpose of tax audits. By
significantly expanding the database available to the tax authorities, the measure will
facilitate the exercise of other powers such as the use of presumptive income tables and
audits of persons not in conformity with sector studies. Further, INPS will be required to
inform the tax authorities of the social and welfare services and benefits provided to
taxpayers, thereby making it easier to check the accuracy of declared incomes.
To foster the modernization and efficiency of payment instruments and reduce the financial
and administrative costs deriving from cash management, payments by general government
in amounts greater than €500 are to be made by means of electronic instruments and
cashless procedures.
A.2 Tax reductions
The austerity package entails revenue decreases of €7.6 billion in 2012, €10.2 billion in 2013
and €12.0 billion in 2014. Apart from the safeguard clause, the main measures introduce tax
reliefs in favour of firms.
Deductibility of the return on new equity. - Among the measures for growth, the decree
law introduces an "aid to economic growth" modelled on the allowance for corporate equity,
i.e. in the form of the deductibility of the normal return on equity, estimated by applying a
notional return to new issues of equity. This mechanism makes for greater tax neutrality in
the choices of corporate financing, fostering a reinforcement of Italian businesses' capital
structure.
The facilitation applies to increases in equity capital with respect to the level at the end of the
financial year in course on 31 December 2010. Given its incremental nature, the measure
can couple moderate losses of revenue with powerful incentive effects and enable firms to
undertake more innovative and potentially more productive and remunerative investment
projects. Consequently it can foster the growth in size of Italian firms and impart impetus to
new initiatives.
The expected reduction in receipts amounts to €1.0 billion next year, €1.4 billion in 2013 and
€2.9 billion in 2014.
Deductibility of IRAP and reduction in labour costs. - The staff costs subject to the
regional tax on productive activities (IRAP) are to be totally deductible from corporate income
tax and personal income tax from 2012 onwards, with an estimated decrease in revenue of
€1.5 billion in 2012, €1.9 billion in 2013 and €2.0 billion in 2014. Furthermore, the deduction
from the IRAP tax base that firms can claim for each new female employee or each new
employee under age 35 hired on a permanent contract is increased by €6,000. By reducing
labour costs, these measures could have positive effects on firms' competitiveness and the
labour market participation of women and young people.
In the case of an employee with gross earnings equal to the national accounts average for
2010, the new deductions for workers under 35 and for women constitute a benefit
equivalent to 0.5 per cent of the cost of labour.
A.3 Measures affecting expenditure
Expenditure will be reduced mainly through intervention on pensions and transfers to local
government. Measures will also be taken to contain the running costs of public agencies and
institutional bodies.
Pensions. - The decree law completely overhauls the rules on pensions.
From 2012 the contributions-based method of calculating pensions will also apply on a
pro-rata basis to people with over 18 years of contributions in 1995: this will reduce, albeit to
a limited degree, the unequal treatment favouring this category (in fact, for everyone else the
new method has been in use since 1995).
From 2018 the adjustment of qualifying age and contribution requirements to life expectancy
and the recalculation of the coefficients for converting the total amount of contributions into
income will take place every two years, instead of every three.
As far as old-age pensions are concerned, the alignment of the qualifying age for female
workers in the private sector to that of other workers will be brought forward. The qualifying
age will be 66 for everyone starting in 2018 (barring any increments due to changes in life
expectancy).
The quota system for long-service pensions is abolished. In order to claim such benefits the
following requirements must be met: in 2012, 42 years and 1 month of contributions for men
and 41 years and 1 month of contributions for women. If retirement is taken before the age of
62, a penalty is levied amounting to 2 per cent for each year up to that age. In addition, the
qualifying age of 62 years and the qualifying contribution period are henceforth anchored to
future changes in life expectancy.
The system of "claim windows" is abolished and the qualifying age and contribution
requirements are increased accordingly. This change does not alter the full retirement age,
but it does simplify the regulations.
For workers paying into the contribution system alone, i.e. those who entered the workplace
on or after 1 January 1996, an element of flexibility is offered: they may claim their pension if
they fulfil the following requirements: 63 years of age, 20 years of contributions, and a
pension equal to at least 2.8 times the minimum state pension. In practice, it will be a long
time before this rule is applied on a large scale. The qualifying age of 63 years will also take
account of changes in life expectancy.
The contribution rate for self-employed workers is increased (by 0.3 percentage points a
year, to a maximum of 22 per cent). A solidarity contribution is introduced from 2012 to 2017,
to be levied on contributions paid into and pensions paid out by the airline workers' pension
fund and other pension funds incorporated into the INPS employee workers' pension fund
(only if those pensions are more than five times the minimum).
Last, the indexation of pensions amounting to more than twice the minimum (€937) is
suspended in 2012 and 2013, thereby reducing net borrowing by €2.9 billion and €4.9 billion.
This measure replaces the one included in the summer reform package. There is no change
in the solidarity contribution applying to pensions of over €90,000 (equal to 5 per cent of the
part from €90,000 to €150,000 and 10 per cent of the amount exceeding €150,000).
Transfers to local government. - The austerity package includes a reduction of €2.8 billion
in local government transfers starting in 2012: €0.9 billion less to the special-statute regions,
€0.4 billion less to the provinces and €1.5 billion less to the municipalities. For the
specialstatute regions the spending cuts are enacted through ad hoc coordination procedures and
for the provinces and municipalities through reductions in transfers to the experimental
"re-balancing" funds (for the redistribution of property taxes) and to the fiscal revenue
equalization funds (as well as in fiscal transfers to such bodies in Sicily and Sardinia).
Operating costs of some public agencies and institutional bodies. - Measures are
introduced to reduce the operating costs of some public agencies. A few of the latter are
abolished and their functions, and permanent staff, transferred to other bodies.
The functions of INPDAP (National Pension Institute for General Government Employees)
and ENPALS (National Pension and Healthcare Institute for the Entertainment Industry) are
transferred to INPS. This measure is estimated to produce a saving of at least €20 million in
2012, €50 million in 2013 and €100 million from 2014, which will be devolved to the sinking
fund for the redemption of government securities.
The decree envisages a reduction in the number of independent administrative authorities.
If the committee instituted under the July package with the objective of bringing the
compensation of Italian elected offices into line with European averages has not completed
its mandate by the end of 2011, the Government will introduce a measure of its own.
The functioning of the provinces is to be overhauled by taking action on three levels:
transferring functions to municipalities and regions (except for municipal policy guidance and
coordination), reducing the number of councillors to a maximum of ten (appointed by the
elected municipal bodies within the province), and eliminating the board of councillors, with
the exception of the chairman. The measures should be finalized by 30 April 2012. More
drastic measures to eliminate and reorganize local authorities may be introduced by laws of
constitutional force.
Economies of scale are exploited by adopting centralized management systems for calls to
tender issued by municipalities with up to 5,000 inhabitants. Moreover, elected offices of
local authorities not envisaged in the Constitution will not receive any compensation.
Increases in expenditure. - The austerity package includes some measures that raise
expenditure; the increase in spending is estimated at €4.6 billion in 2012 and €3.6 billion in
2013 and 2014. The budget funds for development and local transport are increased (by
€1.8 billion each year for the next three years). In addition, peace missions are to receive
new funding (€0.8 billion in 2012) and spending on road transport is expected to rise (by
€1.1 billion each year) to offset the increase in costs resulting from higher fuel taxes.
A.4 Other measures
The impact on the budget of some of the measures included in the package is not quantified
for reasons of caution. Above all, these are measures that regulate the allocation of part of
the revenue from the sale of CO2 emission quotas to the sinking fund for the redemption of
government securities.
The fund is also allocated any revenue from projects envisaged under the package to
enhance public real-estate assets at local level by setting up companies, consortiums or local
property funds. Such projects are promoted by the State Property Office, which works with
the public management agencies and can join the company or other body as partner, as well
as select potential private sector participants. These measures are in line with the
commitments entered into by the previous government.
The austerity package also provides for lira coins, notes and banknotes still in circulation to
lap