Italian Senate passes tough budget

| July 14, 2011 | 0 Comments

The Italian Senate has today passed a tough austerity budget, which proposes cuts of €48 billion (£42 billion) over the next three years.

Senators voted 161 to 135 in favour of the measures.

The country’s Finance Minister, Giulio Tremonti, is aiming to cut the deficit to zero by 2014 from this year’s 3.9% of GDP.

The Lower House of Parliament must now adopt the measures in a vote due tomorrow.

The austerity package comes as fears have been building for Italy, which is the euro zone’s third largest economy, will be forced to accept a bailout like Greece, Ireland and Portugal.

Italy has the second highest sovereign debt ratio in the euro zone and fears for the country becoming the next victim of the crisis has sent European shares falling while the euro has lost ground against many currencies.

Meanwhile, Italy today raised €2.97 billion (£2.6 billion) via a sale of 15-year Government bonds.

However, the bonds offered a yield of 5.9% - a record high for Italian bonds of that duration.

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