Friday, August 12, 2011

Italy outlines austerity measures

Italy's Economy Minister Giulio Tremonti

Source: Press TV

Italian Economy Minister Giulio Tremonti has outlined a government plan aimed at achieving a balanced budget within two years, including measures to raise tax on investment and cuts in social welfare.

"We need to have very strong austerity measures in 2012 and 2013. The crisis has taken a different course, one which has yet to end," Tremonti said, AFP reported.

The government plans to slash bureaucratic costs, launch a program of privatization and implement cuts to the salaries of public service workers, Tremonti added.

Italy has been under mounting pressure from EU leaders to contain its widening budget deficit.

On Wednesday, Italy's Prime Minister Silvio Berlusconi promised to fast forward austerity measures passed last month and get the budget into balance by 2013, a year ahead of the original schedule, but analysts have raised doubts about his ability to implement the necessary cuts.

Earlier, trade unions in Italy had expressed their worries against the government's tougher economic measures, and threatened to stage a general strike should the government go ahead with its planned austerity measures.

Italy's budget deficit currently stands at 3.8 percent of the country's GDP. The government introduced a EUR 48 billion austerity package in July to balance the budget.

However, analysts say the government needs an additional EUR 20 billion cuts in spending to achieve a balanced deficit by 2013.

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