Italy

Austerity package passed by Senate


Published

The Italian upper house, the Senate, passed a €47.9 billion austerity package yesterday by 161 votes to 135 votes. Today the package will go to the lower house, the Chamber of Deputies, for approval where the government has a narrower majority.

The package was presented by Finance Minister Giulio Tremonti. He appears to have had a falling out with Prime Minister Silvio Berlusconi who has not been seen since Monday and who has cancelled a number of public engagements.

The package was fast tracked because investors were giving signs of unrest as borrowing rates hit a record high. Italy’s debt is currently 120% with virtually nil growth.

The Finance Minister has indicated that there is a likelihood of privatisation of the state railway and or the postal service. Also that medical charges will rise, the pension age will increase and those with pensions above €90,000 per annum will receive a higher tax rate.

The government also hopes to save some money by grouping smaller municipalities into single administrations.

On a positive side, there will be credits for research and measures to promote tourism as well as help for young entrepreneurs.

The news agency ANSA is reporting that one government source said that “the overall impact will be more than 70 billion Euros”.

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