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Italy takes action on debt

ITALY’S cabinet yesterday approved a multibillion-euro package of budget cuts designed to slash the government’s deficit to beneath the EU ceiling by 2012.

Details of the measures were not immediately available but a draft of the package included a four-year freeze on public sector salaries, and a reduction in state personnel by replacing only one in five of those who leave.

Italy reluctantly joined Greece, Spain and Portugal in trying to slash budget deficits, which could lead to slower economic growth.