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Italian senators approve austerity package

Italian senators approve austerity package
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Italy’s austerity budget, which is crucial to calming the financial markets, has moved a step closer to being adopted.

The upper house of the Italian parliament, the Senate, approved it by 161 votes to 135 with three abstentions.

The opposition voted against the measure – which is worth 48 billion euros over four years and is aimed at balancing Italy’s budget by 2014.

The lower house of parliament the Chamber of Deputies will vote on the measures tomorrow. They are expected to approve it and the package would be signed into law immediately afterwards.

The vote came against the background of fears that Italy is getting sucked into a widening euro zone debt crisis.

Investors have targeted the euro zone’s third- largest economy because of doubts about its ability to sustain one of the world’s heaviest debt burdens – 120 percent of GDP.

Finance minister Giulio Tremonti has to reduce the deficit and as part of that, the government will begin selling off state-owned companies.

The head of Italy’s Central Bank Mario Draghi takes over at the ECB later this year. He said: “Our banks are stable. They have survived without any real damage from the financial crisis that has shaken large foreign banks. We have fundamental resources that have always characterised Italy. Individual initiative, a capacity to renew, an energy in the workplace.”

Before the vote Emma Marcegaglia, the president of Italy’s Business Association, said: “I think that with this budgetary package, with the cut of public deficit arriving at zero deficit in 2014, plus this liberalisation and privatisation, I think the market can understand that Italy wants to do a good job.”

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