Italy parliament adopts austerity package
The lower house gives final approval for $67bn in financial measures to reduce debt over the next three years.
Last Modified: 15 Jul 2011 17:01

Italy's lower house of parliament has approved a three-year, $67bn austerity package in a rushed vote to try to calm the financial market storm which has sent Italian borrowing costs soaring.

The lower house voted 314 in favour and 280 against the motion on Friday, which hours earlier had passed in a confidence vote.

The mix of spending cuts and tax measures is aimed at protecting Italy from a full-scale financial crisis and ensuring the government reaches its target of balancing the budget by 2014, and was approved by the Italian senate the day before.

The bill passed through parliament with unusual speed after opposition members said it would not hold up the package with delaying tactics because of the risk that financial markets could spiral out of control.

The austerity budget is intended to stave off Greek-style financial collapse, which Greeks have responded to with intense demonstrations.

James Austin of the American University in Rome discusses Italy's debt crisis and austerity measures

Italy's upper house, the senate, has already approved the measures, which advocates say are necessary for the financial health of the eurozone's third largest economy.

The austerity budget will amount to large public service cuts, while the government will sell off their stakes in state-owned companies.

Italy is the third largest economy in the eurozone, but Al Jazeera's Sonia Gallego says Italians are unhappy with the austerity measures and the hardships that will follow.

"Frankly, there is a lot of bitterness," she said.

"They feel that it [the financial crisis] is due to bad governance," and that they should not be held accountable for government folly.

But our correspondent also said there was a general consensus among politicians that austerity measures were necessary.

Italy raised 2.97bn euros ($4.2bn) on Thursday by selling 15-year government bonds, but the country is under pressure from the International Monetary Fund to ensure a "decisive implementation" of spending cuts.

"No one writes a budget such as this without wanting the common good," Guilio Tremonti, the Italian finance minister, told Al Jazeera.

"They're looking at the government, both the majority and the opposition, who often differ. But we are not divided now."

Al Jazeera and agencies
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