Italy to vote on austerity measures to reduce debt
In order to avoid a bailout, the Italian senate is set to vote on austerity measures, which proposes cuts of €48 billion (£42 billion) over the next three years.
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.
Mr Tremonti said the measure would be passed by Friday when it is expected to be passed by the Lower House of Parliament.
The measures come 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.
Furthermore, the yield on Italian bonds continue to rise to levels that could put pressure on the country’s public finances, according to analysts.