A few days ago, we reported that, seemingly out of the blue, the city of Rome was on the verge of a “Detroit-style bankruptcy.” In the article, Guido Guidesi, a parliamentarian from the Northern League, was quoted as saying “It’s time to stop the accounting tricks and declare Rome’s default.” Of course, that would be unthinkable: we said that if “if one stops the accounting tricks, not only Rome, but all of Europe, as well as the US and China would all be swept under a global bankruptcy tsunami. So it is safe to assume that the tricks will continue. Especially when one considers that as Mirko Coratti, head of Rome’s city council said on Wednesday, “A default of Italy’s capital city would trigger a chain reaction that could sweep across the national economy.” Well we can’t have that, especially not with everyone in Europe living with their head stuck in the sand of universal denial, assisted by the soothing lies of Mario Draghi and all the other European spin masters.” And just as expected, yesterday Rome was bailed out.
As Reuters reported, Matteo Renzi’s new Italian government on Friday approved an emergency decree to bail out Rome city council whose mayor had warned the capital would have to halt essential services unless it got financial help.
The decree transfers 570 million euros ($787 million) to the city to pay the salaries of municipal workers and ensure services such as public transport and garbage collection. Renzi, under pressure from critics who say Rome is getting favorable treatment, attached conditions to the bailout.
Rome must spell out how it will rein in its debt, justify its current levels of staff, seek more efficient ways of running its public services and sell off some of its real estate, the government decree said. Rome’s finances have been in a parlous state for years and it has debts of almost 14 billion euros which it plans to pay off gradually by 2048.
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The city has around 25,000 employees of its own with another 30,000 or so working for some 20 municipal companies providing services running from electricity to garbage collection. ATAC, which runs the city’s loss-making buses and metros, employs more than 12,000 staff, almost as many as national airline Alitalia. Rome’s administrators say it needs help with extra costs associated with housing the central government, such as ensuring public order for political demonstrations, and to provide services for millions of tourists.
