Business, Finance & Economics

Italian government calls for confidence vote on austerity measures


Newly-named Italian Prime Minister Mario Monti (L) leaves the presidential palace on Nov. 13, 2011, after Italian President Giorgio Napolitano nominated him to form a new government.



Italian Prime Minister Mario Monti has called for a confidence vote in parliament to take place on Friday in order to speed up the approval of a $43 billion austerity package for the country, Reuters reported.

The Italian government hopes the package will restore market confidence in the euro zone’s third largest economy. The vote was announced by Piero Giarda, Minister for Parliamentary Relations, and it will likely be followed by a similar vote in the upper house next week, Reuters reported.

Read more at GlobalPost: Italy's new government announced by PM Mario Monti

Monti has been feeling the pressure as the global financial markets, Italian politicians and Italian labor unions challenge him. If Italy were to default on its $2.5 trillion in sovereign debt it could cripple the global economy and break up the 17-nation euro zone, the Associated Press reported. Monti has pledged to overcome his opposing forces with his plan, which would reduce public debt, cut government spending, overhaul the pension system and reform the restrictive labor market.

"Resistance is not a novelty when you want to deploy the forces of liberalization and competition," Monti said, the AP reported. "This is resistance that often is not won with the first strike, but with tenacity."

On Tuesday Monti announced changes to his pension overhaul and reintroduced a property tax to gain parliamentary support for the budget he proposed, The New York Times reported. He also dropped plans to tax the wealthy, which had been strongly opposed by the center-right party of former Prime Minster Silvio Berlusconi, saying it would drive capital from the country and not produce a significant increase in revenue, The Times reported.

Read more at GlobalPost: Italy: Is Mario Monti's honeymoon over?