Italian senators say yes to austerity plan

The Italian Senate yesterday approved an austerity plan with €54.2 billion in savings through 2013, as the debt-laden eurozone country sought to assuage markets.

The package was approved by a vote of 165 to 141, which the government had called as a confidence vote in order to speed its adoption in light of “the seriousness of the international financial crisis”.

The value of the package increased from €45.5 billion following hasty revisions prompted by markets concerned by a number of key provisions being eliminated due to political bargaining.

Prime Minister Silvio Berlusconi’s government backtracked on Tuesday and restored a number of those provisions, including a three per cent wealth tax.

It also decided to raise the VAT sales tax and move forward pension reforms, despite a one-day general strike against the austerity package.

The government also said it would adopt balanced budget rules today as part of efforts by the embattled eurozone member to regain the confidence of markets.

The measures should help Italy bring its budget back into balance in 2013 instead of 2014.

The austerity package next goes before the lower house Chamber of Deputies for approval in a vote which could take place before the weekend.