Ook Italië neemt extra maatregelen om begrotingstekort weg te werken (en)
The Italian government has approved a package of tough spending cuts worth €24 billion to be implemented from 2011 to 2012.
Tuesday evening's (25 May) cabinet decision makes Rome the latest administration inside the 16-member eurozone to move decisively to bring down its budgetary deficit.
Concerns over rising European deficit and debt levels have led investors to sell eurozone sovereign bonds, resulting in a 14 percent decrease in the value of the single currency this year.
The Italian measures include a three-year freeze in public sector wages and cuts of roughly €13 billion in funding to regional and local governments. A clampdown on tax avoidance is also planned.
Speaking from the United States, Italian President Giorgio Napolitano said: "It's absolutely necessary to do our part for Europe, to contribute to the financial stability of monetary union and to economic growth."
The move means heavy-spending regions such as Lazio and Campania are likely to have to raise business and income taxes, despite repeated promises from Prime Minister Silvio Berlusconi against such moves.
A number of trade unions have already expressed their concern at the cuts. Guglielmo Epifani, leader of the CGIL, the largest trade union federation, said poorly paid public sector workers would bear the brunt of the measures while the rich would go unaffected.
Similar austerity measures announced in Spain and Portugal earlier this month have also attracted the ire of public employees, with peripheral European states bracing themselves for the possibility of further strikes.
Austerity measures have also prompted a series of protests and strikes in Greece and Ireland, while non-eurozone countries Denmark and the UK have announced their own deficit cutting measures this week. Germany, which currently is carrying a deficit of 5.4 percent of GDP, has also indicated that from next year it will start reining in spending considered excessive in terms of EU rules.
Meeting in Brussels earlier this month, EU leaders agreed additional budget cuts would be needed in some countries as a complement to a €750 billion emergency funding mechanism for struggling eurozone states.
The two measures, together with ECB i sovereign bond purchases, are intended to show markets that European politicians are determined to put their finances in order and defend the single currency.
The Italian cuts, equal to 1.6 percent of GDP, are designed to bring the budgetary deficit back under the three percent allowed under EU rules. Although considerably lower than deficits seen in other EU countries, Italy's debt level is currently 115 percent of GDP, the highest in the region.
Ban on short selling
The financial crisis has also led a number of European governments to crack-down on practices seen as exacerbating the bloc's problems. Last week Germany implemented a unilateral ban on naked short selling of some securities, with officials now indicating Berlin is set to extend this to all German stocks.
The move has attracted criticism from other EU states who were apparently given no warning prior to the German move, with EU officials saying a more co-ordinated approach was needed.
On Tuesday Austria announced it would be extending a current temporary ban on naked short selling by a further six months.
Press Articles
-
-
-
-