 "Italy adopts tough new budget package ahead of key eurozone meet")
Italy’s cabinet has adopted a package of tax hikes and pension reforms worth 24 billion euros (USD 32 billion) in a rush to ease a crisis that is threatening the eurozone.
The cabinet meeting had been scheduled for Monday but it was brought forward by Prime Minister Mario Monti in a bid to finalise the budget reforms before the markets open, in a crucial week for the future of the euro.
A former top European Union commissioner who came to power just three weeks ago, Monti said Italy was at a dramatic crossroads. “We’re faced with an alternative between the current situation, with the required sacrifices, or an insolvent state, and a euro destroyed perhaps by Italy’s infamy,” Monti said ahead of the cabinet meeting.
“The Italian situation is being followed in Washington, Beijing and Tokyo,” the prime minister was quoted as saying during a round of consultations to shore up political and social support for the draconian measures.
[caption id=“attachment_147836” align=“alignleft” width=“380” caption=“The reforms were adopted at a meeting that was pushed forward by a day: Reuters”]  [/caption]Final approval of the reforms in parliament is expected before Christmas.
Italy is under intense pressure from its eurozone neighbours and international investors to introduce draconian measures to rein in its public debt ahead of a crucial European Union summit later this week.
Rome has already adopted two austerity packages this year but the European Commission indicated that Italy would fail to reach its target of balancing the budget by 2013 unless there was more belt-tightening.
Italian media reported that the proposals include an increase in housing and income taxes, as well as new tariffs on luxury goods, and a reform of the pensions system aimed at increasing the pension age for men and women.
Italy’s powerful trade unions immediately voiced opposition to the package.
AFP
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