Follow Us

Follow us on Twitter  Follow us on LinkedIn
 

10 November 2011

Bloomberg: Italy's Senate speeds austerity vote


The Senate is set to vote tomorrow on a package of measures including asset sales and an increase in the retirement age. The Chamber of Deputies should vote the following day.

The budget measures presented last night were first pledged to European Union allies at a summit on October 26 and are aimed at convincing investors Italy can overhaul its economy to reduce borrowing. Months of squabbling within Berlusconi’s Cabinet over the plans ended up fueling the collapse of the government and the selloff of the country’s debt. Berlusconi, after failing to muster a majority in a routine vote yesterday, told President Giorgio Napolitano he would resign as soon as the measures were passed.

The measures presented to the Senate last night include a pledge to raise €15 billion ($20 billion) from real estate sales over the next three years, a two-year increase in the retirement age to 67 by 2026, opening up closed professions within 12 months, and the gradual reduction in government ownership of local services.

The EU and the European Central Bank had pressured Italy to adopt the measures to try to spur growth and cut a debt of €1.9 trillion, more than Greece, Spain, Ireland and Portugal combined. Italy failed to deliver some measures pledged to the EU, such as making it easier for companies to fire workers during economic downturns. The bill did include tax incentives to hire apprentice workers, though won’t seek to modify Article 18 of the labour code, which restricts firing practices.

Once Berlusconi resigns, Napolitano will begin consultation with all the political parties to see if they can agree to form a new government, or whether Italy will go to elections. The major opposition parties favour a unity government rather than an election campaign, and Napolitano could reach outside the political arena for a new prime minister to lead a so-called technical government.

Napolitano last night named former EU Competition Commissioner Mario Monti, considered a leading candidate to head such an administration, as a senator for life, an honorary position that bestows voting rights for the upper house of parliament.

Full article



© Bloomberg


< Next Previous >
Key
 Hover over the blue highlighted text to view the acronym meaning
Hover over these icons for more information



Add new comment