Protests disrupt Monti’s speech on austerity

Opposition senators held up signs saying ‘Enough taxes’ [Reuters]

Mario Monti, Italy’s new prime minister, has been booed and jeered in the Senate as he presented his government’s austerity plans.

The Senate speaker had to suspend the session for about 10 minutes on Wednesday when members of the opposition Northern League whistled and refused his orders to stay silent.

“We are not in a football stadium,” speaker Renato Schifani said in one of several attempts to regain order and allow Monti to resume his address.

The League legislators held up placards against the government’s austerity measures reading “This is not a budget but a hold-up” and “Enough taxes”.

“You, Professor Monti, have made a mistake on the strategy, since you went there to sell off the sacrifices of pensioners and businessmen, and small companies, with a contract already signed, without taking anything back,” Northern League Senator Massimo Garavaglia said.

The bill aims to reduce the budget deficit by around $25bn and balance the budget by 2013. It also includes measures to boost growth.

The lower house of parliament is expected to vote on the package by the end of this week, before it goes to the upper house for final approval next week.

Soaring borrowing costs

Meanwhile, Italy’s borrowing costs reached a record-high as neither last week’s European summit nor the proposed austerity measures have succeeded in restoring market confidence.

Italy had to pay 6.47 per cent on five-year bonds in an auction on Wednesday, up from a previous euro era record-high of 6.29 per cent in mid-November.

Yields on the secondary market on Italy’s benchmark 10-year paper went above 7 per cent, the level at which Greece, Ireland and Portugal were forced to take bailouts.

Monti leads a technocratic government that took over last month after former Prime Minister Silvio Berlusconi resigned over the debt crisis and several political scandals.

The new prime minister’s popularity remains high with a public that seems convinced that only painful austerity can save the country, but there are growing signs of opposition and political obstruction. Continuing high interest rates would undermine the whole reason his government was rushed into power.

Adding to the pressure, Italy’s top union leader told Reuters news agency that Monti’s policies could cause a social explosion and it might be better for the country if he did not remain in power until the scheduled end of the legislature in 2013.

Susanna Camusso, head of Italy’s biggest trade union confederation, the CGIL, said concessions made by Monti on his programme were insufficient and her movement would continue protests which have seen a series of short strikes this week.

She said Monti’s plan spared the rich and forced excessive sacrifices on ordinary Italians.

Also on Wednesday, the International Monetary Fund announced that it will send a team to Italy next week to meet officials of the new government and get updates on the country’s budget situation.

“A small team from the IMF will visit Rome next week to meet with the new authorities, receive updates on recent budgetary developments, and discuss modalities for future monitoring missions,” an IMF spokesman said.