Italian parliament adopts draconian austerity budget - approved the 48-billion-euro ($68 billion) austerity package aimed at averting a full-blown financial crisis
Italian parliament adopts draconian austerity budget
A euro coin superimposed over the Italian flag
Italy has moved swiftly to stem market concerns
The Italian parliament on Friday gave the green light to a draconian austerity budget designed to cut the country’s soaring deficit by 2014 and reassure nervous financial markets.
Italian Prime Minister Silvio Berlusconi kept out of the spotlight as parliament in Rome approved the 48-billion-euro ($68 billion) austerity package aimed at averting a full-blown financial crisis.
But it was Berlusconi who had accelerated the adoption of the plan to signal to financial markets that the world's eighth largest economy was serious about staying out of the debt crisis engulfing Europe.
Italy's lower house of parliament passed the measure by 316 votes to 284, after the Senate, or upper house, approved the bill on Thursday by an equally narrow margin of 161 to 135.
Aware of the gravity of the situation, the country's center-left opposition, which opposed much of the package, refrained from delaying the parliamentary process following repeated appeals in the past week by Economic Minister Giulio Tremonti to rally around the austerity measures. Italy's national debt is more than 1.8 trillion eurosItaly's national debt is the second highest in the eurozone
Agreement reached in record time
In what business daily Il Sole 24 Ore called an "absolute first," the government and opposition parties set aside differences to pass the austerity measures in a matter of days.
The rapid political accord helped calm the massive sell-off of Italian assets at the start of this week, but yields on Italian 10-year government bonds before the vote climbed to about 5.7 percent and spreads over benchmark German bonds rose above 300 points.
The austerity measures call for cutting the deficit to 0.2 percent of Gross Domestic Product by 2014, from 4.6 percent last year, and include curbs in spending for things like hospital fees and other public services. Italy has one of the world's highest public debts at 120 percent of GDP.
Italy's central bank governor and president-elect of the European Central Bank, Mario Draghi, has warned however that the measures now adopted need to be supported by structural reforms to the economy to stimulate growth.
Analysts have also warned that Italy's stagnant economy and tensions within Prime Minister Berluscioni's coalition government are potential risks, but have dismissed the prospect of the country requiring a bailout.
Author: Gregg Benzow, David Levitz (dpa, AFP, dapd, Reuters)
Editor: Andreas Illmer
A euro coin superimposed over the Italian flag
Italy has moved swiftly to stem market concerns
The Italian parliament on Friday gave the green light to a draconian austerity budget designed to cut the country’s soaring deficit by 2014 and reassure nervous financial markets.
Italian Prime Minister Silvio Berlusconi kept out of the spotlight as parliament in Rome approved the 48-billion-euro ($68 billion) austerity package aimed at averting a full-blown financial crisis.
But it was Berlusconi who had accelerated the adoption of the plan to signal to financial markets that the world's eighth largest economy was serious about staying out of the debt crisis engulfing Europe.
Italy's lower house of parliament passed the measure by 316 votes to 284, after the Senate, or upper house, approved the bill on Thursday by an equally narrow margin of 161 to 135.
Aware of the gravity of the situation, the country's center-left opposition, which opposed much of the package, refrained from delaying the parliamentary process following repeated appeals in the past week by Economic Minister Giulio Tremonti to rally around the austerity measures. Italy's national debt is more than 1.8 trillion eurosItaly's national debt is the second highest in the eurozone
Agreement reached in record time
In what business daily Il Sole 24 Ore called an "absolute first," the government and opposition parties set aside differences to pass the austerity measures in a matter of days.
The rapid political accord helped calm the massive sell-off of Italian assets at the start of this week, but yields on Italian 10-year government bonds before the vote climbed to about 5.7 percent and spreads over benchmark German bonds rose above 300 points.
The austerity measures call for cutting the deficit to 0.2 percent of Gross Domestic Product by 2014, from 4.6 percent last year, and include curbs in spending for things like hospital fees and other public services. Italy has one of the world's highest public debts at 120 percent of GDP.
Italy's central bank governor and president-elect of the European Central Bank, Mario Draghi, has warned however that the measures now adopted need to be supported by structural reforms to the economy to stimulate growth.
Analysts have also warned that Italy's stagnant economy and tensions within Prime Minister Berluscioni's coalition government are potential risks, but have dismissed the prospect of the country requiring a bailout.
Author: Gregg Benzow, David Levitz (dpa, AFP, dapd, Reuters)
Editor: Andreas Illmer
Italy's lower house of parliament has approved a three year, $67bn austerity package in a rushed vote to try to calm the financial market storm which has sent Italian borrowing costs soaring.
The lower house voted 314 in favour and 280 against the motion on Friday, which hours ealier had passed in a confidence vote.
The mix of spending cuts and tax measures is aimed at protecting Italy from a full scale financial crisis and ensuring the government reaches its target of balancing the budget by 2014, and was approved by the Italian senate the day before.
The bill passed through parliament with unusual speed after opposition members said it would not hold up the package with delaying tactics because of the risk that financial markets could spiral out of control.
The austerity budget is intended to stave off Greek-style financial collapse, which Greeks have responded to with intense demonstrations.
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Italy's upper house, the senate, has already approved the measures, which advocates say are necessary for the financial health of the eurozone's third largest economy.
The austerity budget will amount to large public service cuts, while the government will sell off their stakes in state-owned companies.
Italy is the third largest economy in the eurozone, but Al Jazeera's Sonia Gallego says Italians are unhappy with the austerity measures and the hardships that will follow.
"Frankly, there is a lot of bitterness," she said.
"They feel that it [the financial crisis] is due to bad governance," and that they should not be held accountable for government folly.
But our correspondent also said there was a general consensus among politicians that austerity measures were necessary.
Italy raised 2.97bn euros ($4.2bn) on Thursday by selling 15-year government bonds, but the country is under pressure from the International Monetary Fund (IMF) to ensure a "decisive implementation" of spending cuts.
"No one writes a budget such as this without wanting the common good," Guilio Tremonti, the Italian finance minister, told Al Jazeera.
"They're looking at the government, both the majority and the opposition, who often differ. But we are not divided now."
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