Italian govt wins confidence vote on austerity

By Frances D'emilio

Associated Press

Published: Friday, Dec. 16 2011 9:40 a.m. MST

Italian Premier Mario Monti, left, talks with Bank Italy governor Ignazio Visco as they arrive for a commemoration of late economist Tommaso Padoa Schioppa, in Rome, Friday, Dec. 16, 2011. The Italian government faces a confidence vote over a package of austerity measures while a transport strike to protest the cuts is causing havoc for commuters across the country. Premier Mario Monti is putting his package of new and higher taxes and pension reforms to a confidence vote in the lower Chamber of Deputies to speed up its passage. The vote, which is expected by early evening Friday, will likely clear the measures, paving the way for final approval in the Senate within days.

Andrew Medichini, Associated Press

ROME — The Italian government easily won a confidence vote Friday on its austerity measures, but new threats emerged against efforts to cut Italy's massive debt and a one-day strike caused chaos for commuters.

Premier Mario Monti had called the vote in Parliament's lower house to speed passage of the €30 billion ($39 billion) in extra taxes and pension reforms that he says are vital to save the eurozone's third-largest economy from financial disaster. About €10 billion ($13 billion) of those savings are going to be reinvested into measures that produce growth.

The package was approved 495-88. Had it been defeated, Monti and his government of technocrats would have been forced to resign exactly a month after the economist was sworn in with the task of keeping Italy from being the next victim of Europe's debt crisis.

The Senate is expected to vote on the measures in the coming days.

Prosecutors in the southern region of Calabria, meanwhile, said they were investigating 10 envelopes with bullets inside that were found a day earlier in a post office in the town of Lamezia Terme. The envelopes were addressed to, among others, Monti, his labor minister, former Premier Silvio Berlusconi and other political or media figures, according to the Italian news agency ANSA.

"We'll be investigating to understand the seriousness of these threats and where they come from," Prosecutor Vincenzo Antonio Lombardo was quoted Friday as saying by ANSA in Lamezia Terme. Reports said the envelopes contained fliers threatening those named if the austerity package wasn't changed.

In recent days, two letter bombs were sent to Italian tax collection offices, and one of the devices exploded, injuring an official. An anarchist group that claimed those letters also took responsibility for a letter bomb sent to Deutsche Bank in Germany.

As lawmakers voted Friday, a nationwide transportation strike upended travel plans for many. Another strike, by public sector employees not in transportation, is set for Monday, reflecting deep anger over budget cuts and pension reform.

Unions are incensed over pension reforms that will make Italians work a longer time and until an older age before being eligible for generous pension checks. In response, Monti's government softened the reforms slightly, leaving him vulnerable to claims by financial experts that the package focused too much on new taxes and not enough on structural reforms.

The wide majority of votes in favor of the austerity package was expected, but that reflected more fear about ousting Monti's government rather than happiness over the new taxes and cutbacks.

Lawmakers on both the left and right have criticized the pension reforms as too harsh. Many of former premier Silvio Berlusconi's loyalists, who make up Parliament's largest party, denounced Monti's decision to revive a home property tax that Berlusconi had eliminated. To appease possible dissenters, the government agreed to give deductions on the tax to Italians with large families.

"Italy is particularly at risk in this crisis," center-left leader Livia Turco told The Associated Press, claiming her Democratic Left party had lobbied to make the package "fairer." ''We have tried to protect the weaker segments of the population."

Those voting against the austerity package included lawmakers from the Northern League, the regional party that was Berlusconi's crucial ally in his two decades in power. The League was particularly irked by the pension reform.

"We believe this government is not serving the interests of the whole country, and above all, the citizens of the north," said Northern League lawmaker Claudio D'Amico.

The pension system only until a few years ago allowed workers as young as 50 to retire with pensions as much as 80 percent of their last paychecks.

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AP reporter Trisha Thomas contributed to this report.

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