Giorgia Meloni has only been at the head of the Italian Government for a week but has already launched an economic proposal that has caused great anger in the opposition. The Executive formed by Brothers of Italy, the League and Forza Italia has decided to raise the limit of cash payments from the current 2,000 euros to about 10,000 euros, a measure that should be reflected in the budget law that is already being drafted by the government financial officers.
With runaway inflation – in October it reached 12.8% – and the obligations imposed by the recovery plan, it is likely that Meloni does not want to carry out large experiments at an economic level, but instead bet on measures of relative scope that do not challenge Europe and keep your electorate happy. And one of them will be this limit on cash payments, a very burning issue in Italy. In the last decade, different governments have moved this threshold several times, from 1,000 euros to 5,000.
There is still strong resistance to stop paying with bills and coins, and one of the arguments most used by Italians is that electronic payments violate their privacy by knowing their purchasing habits. It is usual that, under this pretext, many merchants escape from their tax obligations. In recent years, Rome had declared war on cash to fight tax evasion, a huge – and chronic – problem in the transalpine country since more than 100,000 million euros are evaded every year. The pandemic also helped increase card transactions.
In his speech in the Senate during the investiture debate, Meloni defended raising the limit on payments, ensuring that other countries such as Germany or Austria do not have these types of rules and evasion is "very low." "I confirm that we will change the limit of cash payments," he assured before the Upper House before receiving the confidence of his parliamentarians. The far-right considered that putting a ceiling on cash only "penalizes the poor", and assured that it has no relationship "with the growth of the underground economy".
A study from last year by the Bank of Italy that deals with money laundering and the financing of terrorism does not say the same. Its Financial Information Unit pointed out that having increased the cash limit from 1,000 to 3,000 euros in 2016 contributed to increasing the underground economy and that there is a "causal link" between moving cash and tax evasion in the country.
The initial proposal was from the parliamentary group of the League, which had set this limit of 10,000 euros, although according to the Italian press, after the commotion caused, it could be lowered to 5,000. The opposition has not been slow to criticize it. Senator Carlo Cottarelli, former director of the International Monetary Fund, believes that "taking the limit on the use of cash to 10,000 euros would be a bad sign, as would a new tax amnesty." “Evasion is still a very serious problem,” he pointed out.
The economic manager of the Democratic Party, Antonio Misiani, also stated that he is going against the trend established in recent years in Italy and in part of the European countries to "progressively reduce the use of cash and push for the traceability of payments and the fight against to the underground economy. Just the opposite is the 5 Star Movement. Its leader, Giuseppe Conte, believes that the Government wants to "reward those who go around making payments with 10,000 euros in a briefcase."
