The November 13 terrorist attacks in Paris are destined to send wide ripples throughout the political and economic decisions of European governments, and the Italian Cabinet is now in the process of allocating additional resources for security.
Following an update by Prime Minister Matteo Renzi during a meeting Saturday at the prime minister’s office at Palazzo Chigi with heads of the government's ruling majority and opposition, a move to amend the Stability Law was confirmed yesterday at a meeting at the Economy Ministry.
Deliberations will then move to the Senate, where the budget is being examined by the Budget Committee. The additional financing should be finalized during a second review by the Chamber of Deputies within the next few weeks. But, given the changed landscape after the tragic events in Paris on Friday night, the government may present the amendment to the Senate as soon as in the next few hours.
Before the attacks the spending review co-authored by Matteo Renzi, Pier Carlo Padoan and Yoram Gutgeld (Italy's Prime Minister, Economy Minister and Spending Review Commissioner) had asked for the Defense ministry to come up with €216 million in cuts in 2016, mostly from additional savings on the sale or decommissioning of bases and real estate (€200 million more than what had been previously anticipated).
Last year, the cuts in the original version were in the €500 million range but were eased by parliament to give a bigger boost to Italy's aerospace program. These decisions were controversial, with particular pressure coming from the M5S party, left-wing opposition and members the PD minority, to restructure the F35 program. The government said it was determined to make its defense spending more efficient.
But, as was the case after Sept. 11, the violence of Nov. 13, 2015 in France appears destined to shift the scenario. As mentioned, the Stability Law being discussed by the Senate calls for €219 million in cuts for 2016 (€19 million of which come from a direct reduction in the Defense Ministry's budget).But the move was not etched in stone because the prime minister himself had given a clear indication that he didn't want his hands tied on Defense in the latest spending review.
In recent months the Interior ministry also came in for cuts in the latest financial plan, but apparently not excessive ones. The original version of the Stability law for 2016 called for spending cuts of just over €37 million that year (including €27.2 million at the ministry directly), and about €54 million for 2017 and €73 million for 2018.
Next year's budget also calls for an extension for all of 2016 of the use of 4,800 members of the armed services for “support activity” against organized and crime and environmental offenses.
Then there's the question of contract renewals for public employees. For 2016, the Stability Law provides €300 million for public sector employees, €74 million of which will flow to the armed services and various police forces.
If armed forces with anti-terrorism functions turn out to be essential for a prolonged period, Commissioner Yoram Gutgeld and the government might face the issue of having to tweak the spending review for 2017 to find additional resources.
It can't be ruled out that security issues won't reverberate in sweeping public administration reform that the government was hoping would become one of the motors of the next spending review. The Madia law reforming Italy’s bloated public sector calls for a reduction in the number of Prefectures and cutting the police corps to three from four, with the state forestry police being absorbed into the Carabinieri, or state military police.
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