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Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.
He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.
In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.
Global Real Estate Project
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Italy: Big sell-off, part 2The new Italian government considers on whether to sell significant chunks of its real estate assets. The money is needed in short-term to cover at least partly the record budget deficit and to begin, in mid-term, to diminish the state debt, currently running at 108% of the country's GDP. By considering selling some 'family jewelry' the new Italian center-left government is surprisingly consistent with the policy of its center-right predecessor. In a country which doesn't generate enough fiscal resources in order to run its budget within the strict limitations imposed by its Eurozone membership, significant sell offs may turn to be the only political means without risks of meeting the ends.
Italy before EurozoneItaly is a founding member of the European Union (EU), known in the past also as the European Economic Community or the Common Market. Since the World War II up until the end of 1970s this country has generated phenomenal economic growth, briefly surpassing even Britain as industrial power. One of the main keys for economic growth up until the 1990s has been the weak and devaluating currency, stimulating exports. This policy however had many major drawbacks, it undervalued the local tax base, making necessary for the government to borrow heavily and at higher interest rates in order to remain afloat.When Eurozone was negotiated, including adoption of a common currency, a common central bank, and common rules and financial requirements, Italy was among the countries with highest governmental debt per GDP. To put Italy in comparative perspective, if other major Eurozone countries like Germany and France are still able now to keep their debts below 70% of their GDPs, Italy had succeeded in diminishing its ratio from 122% to 108% of the GDP.
Eurozone constraintsBeing a member of the Eurozone, Italy cannot apply inflation economic stimuli anymore. It must live and make its government live out of what it actually can take from its tax base. In a country with both restrictive domestic and international financial environment however there is no more room for a big government. The existing options are to raise taxes, a move very unpopular in Europe and in America alike, although still more likely to happen in Europe; to lower the taxes across board expecting for the economy to lift off risking yet more debt to be accumulated in the meantime, a move very unlikely in Europe nowadays; to cut social and other governmental programs, a move also very unlikely in Europe, where such programs have been constantly cut since as early as 1980s; and finally, to sell some 'family jewelry', governmental assets, in other words, to privatize and use the money to pay for other current programs and for serving the debt.
Italy's choiceItaly's choice so far has been to sell off, but up until very recently this policy has often been explained with the ideological nature of the center-right governmental coalition. With many political interests to be satisfied, the former government had been in a weak position either to raise taxes or to cut on social programs. It couldn't opt either on exiting the Eurozone and its restrictive financial policy, fearing an inevitable reduction in political influence among the other EU members. Thus privatization was the best option left, and it was used in several occasions. In the last 10 years Italy sold more than Euro 100 billion worth of state-owned assets, including stakes in some of its biggest companies, including the oil company Eni, Telecom Italia, Enel and Alitalia, as well as many of its real estates around the country.The new Italian government would like to sell in the next 1-2 years even more chunks of real estate, and stakes in different companies worth more than Euro 30 billion. In order to reduce the governmental debt by 2010 below 100% of the GDP, using privatization mechanisms only, Italian state will have to sell real estate and other different assets and stakes worth more than Euro 100 billion, including those foreseen in the next year budget.
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See also the directory of companies providing real estate services in, and general real estate information of Italy.
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