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Italy's austerity plan wins vote
Source: Agencies |
September 15, 2011, Thursday
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Premier Silvio Berlusconi's government won a confidence vote yesterday to push forward its disputed austerity package in Italy, which is set to receive final parliamentary approval later in the day.
The package, which has been changed several times amid coalition infighting, is seen as key to Italy's efforts to fend off a financial crisis.
It aims to reduce the country's deficit by more than 54 billion euros (US$70 billion) over three years through budget cuts, tax rises and changes to the country's costly pension system. Italy's deficit to GDP ratio now stands at 120 percent, one of Europe's highest.
The government had called the confidence vote in the lower house of parliament in order to stifle debate and speed up approval. It won the vote 316-302.
Berlusconi's conservatives hold a majority in parliament. However, if a government loses a confidence vote, it must resign.
A final vote on the package, which has already been cleared by the Senate, was scheduled for late last night.
Italy has come under pressure in financial markets because of its high debt levels and poor growth. On Tuesday, the Italian Treasury raised 3.86 billion euros from the sale of five-year bonds, but it had to pay an interest rate of 5.6 percent - a euro-era record high.
Speculation
Berlusconi met EU officials in Brussels and Strasbourg this week to reassure them of the government's determination to balance the budget. Yesterday, he met Wang Gang, vice chairman of China's main government advisory body, amid speculation that Italy is trying to persuade China to invest in its industries.
Berlusconi has come under criticism for his handling of the crisis, and because of the sex scandals that have plagued the 74-year-old's latest stint in power. Reported policy disputes with Finance Minister Giulio Tremonti and coalition in-fighting over the package have added to the doubts surrounding the government's stability.
Critics say Berlusconi does not have the necessary authority and power to pass reforms necessary to stem the crisis, and have called for his resignation.
He has dismissed any such suggestion, and defended his government's handling of the crisis. He has vowed to serve out his five-year term, which ends in 2013.
The package, which has been changed several times amid coalition infighting, is seen as key to Italy's efforts to fend off a financial crisis.
It aims to reduce the country's deficit by more than 54 billion euros (US$70 billion) over three years through budget cuts, tax rises and changes to the country's costly pension system. Italy's deficit to GDP ratio now stands at 120 percent, one of Europe's highest.
The government had called the confidence vote in the lower house of parliament in order to stifle debate and speed up approval. It won the vote 316-302.
Berlusconi's conservatives hold a majority in parliament. However, if a government loses a confidence vote, it must resign.
A final vote on the package, which has already been cleared by the Senate, was scheduled for late last night.
Italy has come under pressure in financial markets because of its high debt levels and poor growth. On Tuesday, the Italian Treasury raised 3.86 billion euros from the sale of five-year bonds, but it had to pay an interest rate of 5.6 percent - a euro-era record high.
Speculation
Berlusconi met EU officials in Brussels and Strasbourg this week to reassure them of the government's determination to balance the budget. Yesterday, he met Wang Gang, vice chairman of China's main government advisory body, amid speculation that Italy is trying to persuade China to invest in its industries.
Berlusconi has come under criticism for his handling of the crisis, and because of the sex scandals that have plagued the 74-year-old's latest stint in power. Reported policy disputes with Finance Minister Giulio Tremonti and coalition in-fighting over the package have added to the doubts surrounding the government's stability.
Critics say Berlusconi does not have the necessary authority and power to pass reforms necessary to stem the crisis, and have called for his resignation.
He has dismissed any such suggestion, and defended his government's handling of the crisis. He has vowed to serve out his five-year term, which ends in 2013.
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