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More austerity for Italy

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More austerity for Italy
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More government job cuts and other reductions in public spending have been outlined by Italy’s Prime Minister Mario Monti.

Despite strike threats from the country’s powerful unions Monti is talking about cutting the number of civil servants by 10 percent and getting rid of one in five state managers.

The government also plans to further centralise the state’s purchases of goods and services – in particular for health care.

The PM said the cuts are urgently needed otherwise sales taxes will have to go up by two percent in October.

The spending cuts now threaten to sour relations between the Rome government and unions yet further.

“Be careful of creating social conflict,” Susanna Camusso, leader of Italy’s largest labour union, the Cgil, said before going in to a meeting with the prime minister.

Camusso said a unified general strike by all the unions in favour of jobs “must be used”. Raffaele Bonanni, the head of the second biggest union, said on Monday that he was ready to call a nationwide general strike if cuts were indiscriminate.

At a meeting with regional government officials earlier in the day, Monti said the cuts would be permanent and would be worth more than the originally announced 4.2 billion euros for this year because of the need to raise emergency funds for May’s earthquakes in the northern region of Emilia-Romagna.

The value of the 2012 cuts could be as high as seven billion euros, Reuters reported last month.