Italy passes austerity plan

City A.M. Reporter
ITALY’S senate yesterday approved the government’s controversial austerity plan, which aims to balance the beleaguered country’s budget by 2013.

The package, originally approved by the cabinet last month, has been radically overhauled on several occasions during its passage through the Senate, under pressure from the European Central Bank and the EU.

Last night Silvio Berlusconi’s government yielded to growing calls for the package to be reinforced, increasing value added tax, extending the retirement age for women in the private sector and introducing a tax on very high earners.

Police used tear gas and baton charges to disperse demonstrators protesting against the measures outside the Senate while the vote took place.

The mix of tax hikes and spending cuts amount to more than €54bn over the next three years, the Treasury said.