New Italian premier proposes ambitious economic reform

Italian Premier Matteo Renzi has introduced a series of decrees aimed at helping Italy's working class through payroll taxes and spending cuts. Renzi also announced a plan to fix schools and create jobs.

Italian Premier Matteo Renzi on Wednesday offered relief to workers and businesses alike in an ambitious package of economic reforms that he said would lay the groundwork for bigger structural changes to come.

Renzi's government approved a raft of new decrees, including 10 billion euros ($14 billion) in payroll taxes aimed at helping Italy's working class. The measure would put 1,000 euros a year back into the pockets of 10 million Italians who take home 1,500 euros or less a month, Renzi said.

For businesses, Renzi outlined tax cuts and reductions in energy costs.

The money would come from spending cuts, not raising taxes, the premier said, adding that Italy has enough jockeying room to stay within the EU budget deficit limits. Renzi has sought to profile himself against previous governments that sought to boost Italy out of economic doldrums through austerity measures.

"There has never been a reform course so meaty and significant," Renzi told a news conference in Rome.

He stopped short of promising a "new Italy," but said the country would be "lighter and more capable of taking on structural reforms'" by July 1, when Italy takes over the rotating EU presidency.

He also announced money to fix decaying school buildings, to create jobs for young people and plans to raise the tax on investment earnings from 20 percent to 26 percent, and to free up money to pay off the public administration's 90 billion euros in private sector arrears by the end of July.

Renzi was jocular during his hour-long presentation, which was accompanied by a colorful slideshow that immediately took on a life of its own on social media, with users poking fun at the graphics of grocery carts and goldfish in a glass bowl.

Renzi won his first major parliamentary battle earlier in the day, when the lower house passed a controversial new electoral law that aims to create political stability by producing a clear winner. The measure heads to the Senate, which Renzi has vowed to abolish.