ROME (MNI) – Italy’s lower house of parliament late Friday approved
a E30 billion austerity package introduced by Italian Prime Minister
Mario Monti with the express aim of salvaging Europe’s third-largest

The lower house approved the measures on a vote of 402 to 75 late
Friday night. Both former Prime Minister Silvio Berlusconi’s People of
Liberty Party and the leftist Democratic Party backed Monti’s plan. The
austerity measures still require approval by the Senate, where debate on
the plan will begin on Dec. 21 and a vote is expected to be held on Dec.

The budget measures are aimed at ensuring that the euro-area’s
second biggest sovereign debt burden doesn’t force Italy into default.
Monti, who was appointed as leader of a government of technocrats after
his predecessor Berlusconi resigned last month amid financial market
turmoil, faced a major political test in parliament with the austerity
package votes.

Once approved, Monti’s policies will need to win the confidence of
financial markets in order to bring down the borrowing costs on the E1.9
trillion Italian debt.

Since he first announced the plan, Monti has had to accept a series
of modifications, including a request for changes in his pension reform
plans and watering down of his property taxes in order to build support
for the measures before the parliament’s vote.

He has had to agree on a child-incentive scheme for parents, tied
to the reintroduction of a property tax on primary residences, and has
had to introduce a new 15 percent levy on pensions of more than E200,000
in order to push through the overall reform plan.

Monti’s so-called “save Italy” measures include the re-introduction
of a first-home real estate levy; pensions reform; an additional one-off
1.5 percent tax on capital brought back into Italy from abroad as part
of a tax amnesty introduced by the previous government; and higher taxes
on luxury cars and boats.

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