Italy's Monti faces confidence vote on austerity

Thu Dec 15, 2011 6:41pm EST
 
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By Gavin Jones

ROME (Reuters) - Italy's government faces a confidence vote in parliament on Friday, a move to speed up approval of a 33-billion euro ($43 billion) austerity package intended to restore market confidence in the euro zone's third largest economy.

Mario Monti's government of unelected technocrats has an overwhelming majority in both houses of parliament and the vote, to be held in the Chamber of Deputies in the afternoon, should pass easily.

The austerity plan will then move to the Senate, where a similar vote is expected to be held before Christmas, marking the final passage of a decree law that went into effect on December 4 but needed parliamentary approval within 60 days.

Monti's government was appointed last month to face a collapse in market confidence that put Italy at the heart of the euro zone debt crisis. He has raced to push through the package of tax hikes, spending cuts and pension reform aimed at meeting Italy's goal of balancing its budget in 2013.

However, analysts say rising borrowing costs and the prospect of a fast-deepening recession still threaten to undermine Italy's fiscal consolidation efforts.

The government resorted to confidence votes to curtail debate on dozens of amendments to the law, many of them tabled by the opposition Northern League party.

Monti's predecessor, Silvio Berlusconi, had urged a confidence vote, saying his PDL party -- the biggest in parliament -- would support the government out of a sense of responsibility, not because it agrees with all the sacrifices being asked of Italians.

RECESSION   Continued...