Italy is quickly developing a reputation as the new sick man of Europe. While the hubbub several years ago about Greece and the peripheral EU member states dragging down the EU financially has died down, Italy’s debt crisis may actually result in a fracturing of the EU. With Rome and Brussels at each other’s throats, and Italy threatening to ditch the euro and issue its own currency again, it’s only a matter of time before Italy’s fiscal problems drag the rest of Europe down with it. The only question is how long it will take.
In a bid to improve its fiscal situation, the Italian government is desperately trying to come up with as many sources of revenue as it can. That now includes looting safe deposit boxes, which the government must think are hiding huge amounts of black market income. The government is floating the possibility of a 15% tax on all assets in safe deposit boxes, hoping to gain tens of billions of euros in easy revenue. Whether those assets will still be in safe deposit boxes once the government actually enacts such a proposal is questionable, however.
Italy’s move may give impetus to other similarly indebted governments to try the same thing. With the US government’s debt to GDP ratio climbing every day, it won’t be that long before the US reaches Italy’s level of indebtedness. At that point the government may do anything it can to scare up money, and taxing safe deposit boxes, bank accounts, or other sources of assets won’t be off the table.
Remember that the US government banned the private ownership of gold for over 40 years, so the precedent is there. If you think your assets are safe at the bank, you might be in for a rude surprise in the coming years as politicians come after more and more of your money to pay for their inability to keep government spending in check.
