Italy Approves New Austerity Package
5:27am UK, Saturday August 13, 2011
The PM stated the measures were fair
The Cabinet concurred on the measures on Friday despite fierce resistence from local government officials who claimed they were “socially unjust”.
Prime minister Silvio Berlusconi stated the measures were fair and responded to requests from the European Central Bank (ECB).
The ECB has demanded a balanced budget a year earlier than anticipated as well as structural reforms to promote growth.
The Cabinet approved 20bn euro (£17.5bn) in cuts for 2012 and 25bn (£22bn) for 2013.
On Wednesday the Milan stock market suffered its sharpest one-day drop since the Lehman Brothers crisis in October 2008, with the main index falling 6.65%.
The drastic sell-off of Italian stocks and bonds over the past month has put paid to the government’s frequently repeated claim to have kept Italy out of the eurozone debt crisis.
The public debt burden, at 120% of gross domestic product (GDP), is second only to Greece’s in the eurozone but a relatively modest deficit and a generally conservative financial system had shielded it until recently.
source : news.sky.com
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Submited at Sunday, August 14th, 2011 at 12:00 am on Business by jessica
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