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Sorry, Penny, but I do not see any restriction in paying for articles or services worth more than 2,500 euros. The only restriction concerns the form of payment, we will not be able to pay cash for it, but we can pay using any other means: cheque, money order, credit or debit card. The idea is to stop those cash payments which are not declared and do not pay VAT. On the other hand, I think that the VAT is not helping the economy. It may be a quick way for governments to collect money; however, it affects the purchasing capabilities of people on lower incomes. In my opinion, taxes should be collected on revenues and not on expenditure. The only exception I would make would be on alcohol, cigarettes and luxury goods, property and services. If people on average or lower incomes could have more money to spend by not paying VAT, this would help the economy as these people would be able to spend more money on many things they really need. And we know that if people are able to consume more, this would generate more production and keep the economy running. An extra 21% of purchasing power could go a long way and the government would be able to get back that many in many other ways.  

In my opinion:

• An increase in VAT, from 20% to 21%

It is not a big increase; however, I think that VAT in general punishes those on small incomes. I would rather see increases in personal income tax, particularly for those on above average incomes.

• A freeze on public-sector salaries until 2014

This is what most other countries are already doing. Here again, I would diferentiate between high and low income earners.

• The retirement age for women in the private sector will gradually rise, from 60 in 2014 until it reaches 65 in 2026, the same age as for men

Nothing new here, Italy was due to change that legislation. Many other countries already do this.

• Measures to fight tax evasion will be strengthened, including a limit of 2,500 euros on cash transactions

This is a good measure, providing that they will be able to monitor it. And I do not mean the "Guardia de Finanza" chasing ordinary people to check whether they have their "scontrino" for the cup of coffee they just had at the local bar....

• There will be a special tax on the energy sector

Gosh! This is a real disaster for low income people, pensioners, etc, as ultimately this tax will be paid by everyone. ½ûÂþÌìÌÃs already pay a fortune for their energy. A real worry!!!!!   

Great advice from both Ram and La Dolcevita. It is not easy to get loans right now, not only in Italy but throughout the world. The banks have tighten their lending capabilities and it is quite difficult to ascertain your prospects under the current conditions. Think very carefully and envisage this as a business matter. Don't let your emotions rule the deal. Right now it is very difficult to survive for most businesses, but there is always an element of luck that you cannot control. Make sure that you are paying a reasonable price for the property and be careful calculating the cost of adapting it to your business. And when you have those costs worked out, multiply by three... there are always hidden costs, contingencies, etc. Also, make sure that you have enough money to operate at a loss for a few years. It is said that, if you can survive the first 4 years, you should be right. Perhaps you may think that I am a bit pesimistic; however, I am trying to play the role of the devil's advocate. We all have dreams, but we do not want them to turn into nightmares. In any case, I wish you lots of good luck and fortune.

La Dolce Vita, if you want inspiration here is an excellent blog also on Wordpress: The stories are great, the photos are superb and there are many followers and fans (including myself) who are totally sold on it. To me it was very important, as it deals with my area in Italy. Last May, I met the two ladies who share it and it happened that we had many friends in common. We correspond a lot nowadays. It is a lot of work, as one of them practically has a new post everyday and she needs to get material to do this; however, it is amazing how something simple like the flowers you plant in a balcony can become a very interesting topic. But the photos are most important. They bring life to the blog. Also, you have to post regularly. Otherwise, people tend to forget about you. And it is important to involve the readers. Their comments are important and can even give you more ideas to follow. Anyway, you are doing well Godzillavilla (I love the name!) and I am sure that we all look forward to reading more chapters. Good luck!

Joy, it is a great idea and it works. I have done this with a few relatives and friends who have suffered strokes or similar illnesses. They all enjoy this, it makes them "travel" a bit with me and they look forward to receiving them. Please send me a PM with the address. I will certainly do it. I only hope that I will know how to write to a 9 year old!!!!! 

It has been happening since the crisis started. Most people seem convinced that the solution is to get rid of the head of government of the particular country that is in trouble. It happened with each one of the PIGS... well, Spain, although we were good kids and did what we were told, poor Zapatero will finish his "reign" on November 20th when we will have general elections. A few months ago he announced that he was not seeking reelection and his successor, Rubalcaba, does not appear to be the winner. The power will go to the hands of the leader of the opposition, the conservative Rajoy. Italy was not on the list, but managed to make it... Now, my question is: Killing the messenger or findig a scape goat for our woes would be the ultimate solution? Were all these heads of government guilty of throwing the EU into desarray? Is their demise going to fix anything? Don't get me wrong. I never liked Mr B. Everyone of those who had to go were somehow guilty... at least of negligence. And what about the big decision makers. Should they also go? Chopping heads is not going to get us anywhere. On the contrary, it could cause further imbalance and turmoil. It would be like simply giving an aspirin to a cancer patient.

It sounds very interesting, so I have become a follower. I can see that it is a disease... you see a ruin and you start to wander what you could do with it. In any case, good luck and keep on posting.

I think that most of us will agree that Mr B is an embarrassment; however, it is difficult to see who would be prepared to take over and get Italy into a safer position. Right now, anything can tip the very precarious balance and stability is a most precious commodity. Too many vultures and jackals are waiting. This applies not only to Italy but to all those economies which are at risk. In these cases, perhaps it may be a case of "better the devil we know...."

I've just seen this real gem: Wondering how long it will be before we see a similar move in Europe.

Ordinary people would have expected that someone, perhaps the respective governments or the same banks would have said, much earlier, that what they were doing was wrong and dangerous. Nobody said anything until it was too late. And this huge debt affects everyone, as we will pay for it through increased taxes, etc. The press.... they publish whatever suits them and what they can sell. I do not think that there is accurate and impartial reporting. We are lucky that we do not have a mortgage to repay and that we bought our properties wisely and at a fair price, but I do feel for all those families who are suffering the consequences of what is going on. Perhaps they lived beyond their means, but they were actively encouraged to do so. We live between Italy and Spain, and we go very frequently to France and to the USA. As we talk to the locals we see the depth of this crisis. And we get angry and frustrated. Perhaps it is about time to join the "indignant movement" and protest... On the other hand, I do not see much leadership or brains behind that movement. Time will tell.