Austerity Plans a Necessity Berlusconi Says

Jul 1, 2011, 09:23 by R.E. Christian

Italian Prime Minister Silvio Berlusconi says an austere spending program must be adopted to keep Italy from the same financial fate as Greece.

Berlusconi said Friday he proposes changes to cut more than $60 billion from its budget in the next several years to avert a debt downgrade from Moody's Investor Service.

Berlusconi said the government would push its stringent austerity package through Parliament and but is willing to listen to "good advice" from opposition parties, the Italian news agency ANSA reported.

The Italian cabinet approved a proposed budget Thursday expected to eliminate Italy's budget deficit within a few years. Italy's debt currently stands at 120 percent of gross domestic product.

"The good family-breadwinner sense that we used in working on this package will continue in Parliament, where we'll accept amendments that are not partisan, but of good sense, ... as long as they go in the direction of budget rigor so that the markets cannot attack us," Berlusconi said.

Key measures in the budget include cutting funding for ministries and local authorities, tax increases on some bank trading activities and high-consumption vehicles, a freeze on civil servant pay and a tax on stock market transactions.

Italian officials said the austerity budget is necessary to prevent Italy from a financial collapse comparable to that in neighboring Greece.

Opposition leaders complained the proposed budget cuts should be implemented sooner.

Source: UPI