Italy senate passes Monti's austerity package

Mario Monti (15 December 2011) Mario Monti took over from Silvio Berlusconi as Italian prime minister

Italy's senate has passed a confidence vote on austerity measures planned by Prime Minister Mario Monti.

The package includes spending cuts, tax rises and pension reforms. It had already passed in the lower house.

Although all political parties had reservations about aspects of the programme, the measures were passed with a comfortable 257 to 41 majority.

Mr Monti leads a government of technocrats tasked with leading Italy out of its debt crisis.

The 30bn euro ($39bn; £25bn) package was widely expected to be passed.

The new prime minister, who took over from Silvio Berlusconi last month in response to the crisis, says that without the measures Italy would face economic disaster like that which has affected Greece.

Mr Monti calls the austerity cuts his plan to "save Italy". The package of reforms was also passed by the lower house, the Chamber of Deputies, by a large margin last week.

Italy's austerity measures

  • Local housing tax reintroduced (3.5bn euros per year)
  • VAT rises
  • Property sales (5bn euros per year)
  • Utility sales
  • Health spending cuts (5bn euros from 2013)
  • Higher minimum retirement age
  • State pension age to rise to 66
  • Cash transactions above 1,000 euros outlawed to discourage tax evasion

The former EU commissioner has broad support in parliament: the two main parties feel they cannot sabotage the bill for fear of unleashing economic catastrophe, analysts say.

Silvio Berlusconi has said his centre-right PDL party would back the government out of a sense of responsibility, not because it agreed with the sacrifices being asked of Italians.

The BBC's Alan Johnston in Rome says that Mr Monti can expect to face mounting opposition to his plans, particularly from the unions.

They believe that too many sacrifices are being demanded of poorer families and pensioners, and that the wealthy are not sharing enough of the burden, he reports.

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