ITALY: Insolvent Solution

Three weeks ago, beset by the threats of strikes among Italy's teachers and civil servants, Premier Antonio Segni passed out an average raise of 12% to every civil servant-an annual total of $425 million. Compared to Italy's gross national product, this generous gesture was equivalent to raising the cost of government in the U.S. by $7 billion at one stroke. Everybody agrees that 1) Italian civil servants are underpaid, 2) Italy's 1,000,000-man bureaucracy is inefficient, cumbersome. Segni, before raising the pay, had had parliamentary permission to change the system, but he let the power lapse without making any real...

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