Wednesday, September 7, 2011

Italian lawmakers ponder more austerity measures (AP)

ROME ? Italian lawmakers studied last-minute adjustments Wednesday to the government's hotly disputed austerity package, changes that Italian media reported aim to reduce the deficit by more than euro54 billion ($70 billion) over three years.

Senate budget committee officials said they couldn't immediately confirm the reports of new taxes and spending cuts totaling euro4 billion ($5.7 billion) because lawmakers were still studying the measures ahead of a full Senate confidence vote Wednesday evening.

The European Central Bank has demanded stiff austerity measures to calm financial markets nervous about Italy's credit worthiness.

When the deficit-battling package was unveiled by Premier Silvio Berlusconi on Aug. 12, the package added up to euro45.5 billion ($64.1 billion) But weeks of waffling by squabbling coalition allies whittled down the combination of new or higher taxes and spending cuts, further shaking the markets' confidence, and the government moved to increase the measures at a Cabinet meeting Tuesday.

"The decisions taken yesterday by the Cabinet have strengthened the measures significantly," Antonio Azzollini, the head of the Senate's budget committee, told the assembly.

Azzollini, from Berlusconi's party, said sales taxes on goods and many services would be raised from 20 percent to 21 percent, an additional income tax of 3 percent would be on levied on incomes exceeding euro300,000 (nearly $450,000), and the timetable for raising the retirement age for women would be speeded up from 2016 to 2014.

Berlusconi had originally shied away from putting the package to a vote of confidence in his government, but decided to speed up its passage after ECB president Jean-Claude Trichet, during a visit Saturday, appealed for quick, decisive action to save Italy's credit reputation.

If the vote fails, Berlusconi must resign. His center-right forces have a comfortable majority in the Senate, but some of that edge could be eroded if his squabbling allies object to the pension reform.

Source: http://us.rd.yahoo.com/dailynews/rss/world/*http%3A//news.yahoo.com/s/ap/20110907/ap_on_bi_ge/eu_italy_financial_crisis

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