Monti : Italy embroiled in tax war, will cut debt

Italian Premier Mario Monti said Friday mass local participation in tax evasion has turned Italy into a fiscal "war zone," adding that this has in turn contributed to the negative factors that have made some countries "badly predisposed towards Italy." The prime minister said he was referring to countries "which Italy could need to turn to from time to time for financial assistance," according to an interview with Tempi, an Italian online daily. Monti was appointed in November 2011 to replace outgoing Prime Minister Silvio Berlusconi amid spiralling public debt costs in a bid to salvage Italy from a Greek-style debt crisis. Monti said the countries in question were Northern European countries that were aware "that Italy is a very rich country, but that it also has a heavy public debt that these very nations may be called upon to help sustain, and yet that there are many high and medium Italian earners that don't pay their taxes". The prime minister said that this justified the very strong measures that have been taken by his government since he was appointed in November, which he personally approved. A wide-scale crackdown on tax evasion in Italy has even led in some cases to multiple suicides amongst citizens that have found themselves laden with tax bills they were unable to pay. Monti said his technocrat government has since November been focussed on reducing Italy's public deficit and on introducing structural reforms, and said these very measures have convinced Europe and the rest of the world that Italy is "able and determined" to introduce far-reaching changes in its structures. Monti's government has in recent months introduced measures that include plans to curb public spending, reform Italy's labour legislation, and cut red tape and bureaucracy. Monti confirmed the government will push ahead with an announced plan to introduce new state asset sales to reduce debt ahead of the next elections in the spring of 2013. "It is good to accompany these reforms with the reduction of public debt to be achieved through asset sales," Monti told Tempi. "Had we simply given priority to reducing public debt, we could have conveyed the message that Italy didn't believe structural reforms to be necessary, and that would have been an extremely negative signal to give out to the markets and to the European Union".