Sept. 6 (Bloomberg) — Italian Prime Minister Silvio Berlusconi called a Cabinet meeting today to authorize a confidence vote in Parliament on an amended 45.5 billion-euro ($64.5 billion) austerity plan that prompted a general strike.
The meeting at 6 p.m. in Rome will pave the way for a vote on the measures, which will include raising the value-added tax rate by one percentage point to 21 percent, a 3 percent levy on incomes of more than 500,000 euros a year as well as an increase in the retirement age of women in the private sector starting in 2014, Berlusconi’s office said in an e-mailed statement.
The premier called the meeting as Italians took to the streets to protest the budget cuts and after weeks of bickering on the measures stoked concern among investors and European leaders about Italy’s ability to prevent contagion from the region’s debt crisis. The Senate began debating the package today and may approve it as soon as tomorrow, leading to a final vote by the Chamber of Deputies by week’s end.
“The government has not been up to the task of handling this crisis,” Susanna Camusso, head of Italy’s biggest union CGIL, told demonstrators outside the Coliseum in central Rome. “This is an unfair and useless budget plan and totally irresponsible as it hits workers and pensioners.”
The premium investors demand to hold Italian 10-year bonds instead of benchmark German bunds dropped to 364 basis points as of 5:13 p.m. in Rome, after soaring to 371 basis points yesterday, the highest since before the European Central Bank started buying Italian bonds on Aug. 8. The yield fell to 5.487 percent after hitting 5.557 percent yesterday.
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