Italy gives final approval to austerity plan

Italy’s Parliament gave final approval to Premier Silvio Berlusconi’s government’s austerity measures, a combination of higher taxes, pension reform and slashed spending that sparked street protests in Rome.

The Chamber of Deputies passed the package by a vote of 314-300. The Senate, Parliament’s upper chamber, already approved the measures.

Hundreds of demonstrators, some unleashing smoke bombs and others hurling paint, clashed with police in riot gear in the cobblestone squares and streets near Parliament as lawmakers were voting on the measures designed to fend off a financial crisis threatening much of Europe.

Earlier in the day, Berlusconi’s government, whose allies had squabbled publicly over the package, won a crucial confidence vote called to discourage debate and hasten approval. European Central Bank and European Union leaders in Brussels had pressed Rome for quick passage to calm markets roiled by a crisis that could endanger the entire 17-member eurozone.

But the planned cuts and taxes have angered many Italians, fueling protests similar to those in other European nations grappling with the economic crisis.

As the street protest heated up, Rome storekeepers hastily shuttered display windows. With police helicopters buzzing overhead, officers in riot gear fanned out through the squares and alleys, herding the protesters away from Parliament and from the downtown palace where Berlusconi resides. At one point an officer struck a protester on his back with a club.

Berlusconi contends that the measures will shave more than euro54 billion ($70 billion) off Italy’s deficit over three years through spending cuts, tax hikes, including raising the sales tax from 20 percent to 21 percent, and accelerating reform of the country’s costly pension system.

Italy’s deficit-to-gross domestic product ratio now stands at 120 percent, one of Europe’s highest.

Italy has taken a pounding in the financial markets because of its high debt levels and poor growth. On Tuesday, the Italian Treasury raised euro3.86 billion ($5.27 billion) from the sale of five-year bonds, but it had to pay an interest rate of 5.6 percent — a euro-era record high for Italy.

The debt problems of Italy, the eurozone’s No. 3 economy, deepened fears across Europe over the health of the 17-nation eurozone and its vulnerability.

“The attack of the markets against Italy is a head-on assault on the entire eurozone,” visiting Germany Economy Minister Philipp Roesler, said in Rome where he held talks with Italian Cabinet ministers.

This entry was posted in Italy Vacation Packages. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *