Italy's New Finance Minister Speaks
Domenico Siniscalco grabs a pencil and a piece of scrap paper and whips off a quick V-shaped graph: his projection for how slashing the deficit and then cutting taxes
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INDICATORS
Ackermann Cleared
A German court acquitted Deutsche Bank CEO Josef Ackermann and five former Mannes-mann executives of criminal breach-of-trust charges related to the German telecom firm's 2000 takeover by Vodafone. The six had been accused of granting excessive bonuses to Mannesmann bosses. Prosecutors said they would appeal the verdict.
Called Back
The European Commission ordered France Télécom to repay up to 31.1 billion in state aid it received through tax breaks between 1994 and 2002. Brussels also slammed the French government's verbal support and the unused 39 billion credit line that it pledged to the firm in 2002.
Taking the Medicine
German drugmaker Bayer agreed to buy the nonprescrip-tion drug business of Swiss rival Roche for $2.9 billion. The deal lifts Bayer into the world's top three manufacturers of over-the-counter medicines. |
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will help kickstart the Italian economy. Italy's new Finance Minister has all the smooth loquacity of a Rome politico, but he's a number-crunching economics professor at heart. And these days maybe only a wonk can handle Italy's books. Siniscalco, 50, spent the past three years as the top technical adviser to now-departed Finance Minister Giulio Tremonti. In his first interview since taking over the ministry earlier this month, Siniscalco told TIME that his move to the top means "a fresh start. It's not a U-turn. Obviously, I'm a sign of continuity. But it's like pressing 'reset.'" His first big accomplishment: getting bickering coalition allies to grant initial Cabinet approval for 324 billion in cuts to the 2005 budget that would bring a projected 4.4% deficit below the 3% ceiling mandated by euro-zone membership. He also managed to convince the government to put off some long-promised tax cuts until the deficit is under control next year. "I'm deeply convinced that economic performance depends on decisions made by [Italy's] 60 million people," Siniscalco says. "And our job is to give them the right signals." Siniscalco believes Italians understand that public coffers must be put in order before fiscal breaks start flowing.
Meanwhile, Prime Minister Silvio Berlusconi is hoping Siniscalco's skills as a consensus-builder will help hold the fractious coalition government together. (In an attempt to placate his Christian Democratic allies in the UDC party, Berlusconi announced that UDC stalwart Rocco Buttiglione will replace Mario Monti as Italy's European Commissioner in October.) Siniscalco is conferring with other Cabinet members, and even reaching out to Italy's powerful unions, before finalizing decisions on the economic blueprint for the next four years due this fall. The question for Siniscalco, and for Italy, is whether Berlusconi's government will still be calling the shots when autumn rolls around.
| The Bottom Line |
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We will have a high-class problem to deal with.
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JOHN CONNORS, CFO of Microsoft, on being left with a $24 billion cash pile even after the firm announced it would pay shareholders a $32 billion dividend this year, the biggest payout of its kind |
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