Milan's boom masks a silent tax revolution

The other Italian renaissance is a shrinking shadow economy.

- Lionel Laurent

Is Italy's renaissance driven by a lighter touch on tax?

That was the accusation recently lobbed at Rome by French Prime Minister Francois Bayrou, who said the tax sweeteners attracting wealthy expats to booming Milan—known colloquially as the "empty London" strategy—were now at risk of emptying Paris. At a time when France is struggling to plug the budget deficit, Italy is engaging in "fiscal dumping", he claimed.

The pushback from Ms Giorgia Meloni's government was swift, calling these comments "unfounded", which is fair enough. It's certainly legitimate to question the risks of tax-based competition for the rich when Milan is pricing out locals and a sprawling corruption probe has ensnared the city's mayor.

But for Paris to complain is a bit much considering France has played similar cards to win minds and wallets from London—arguably to even greater success, with some 5,000 international hires enjoying preferential tax treatment versus 1,000 to 2,000 in Milan.