Italy’s Senate Approves €30B Austerity and Growth Package

Italy’s Senate approved on Thursday a 30 billion-euro austerity and growth package aimed at eliminating Italy’s budget deficit by 2013 and stimulating economic growth as part of a broader plan to stabilize the euro.

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Prime Minister Mario Monti’s government won the confidence motion in the upper house of Parliament yesterday by a safe margin of 257 to 41, clearing the way for the package, which was last week endorsed by the lower house, to take effect.

The measures reinstate a property tax on first homes, among other tax increases, raise the retirement age to 66 for men and 62 for women by 2012, and raise the ceiling for cash transactions to $1,300, among other things to crack down on tax evasion. To stimulate growth, the measures also provide tax incentives for businesses hiring women and people under 35 on permanent contracts.

Just before the vote, Monti gave a speech highlighting the importance of orienting European economic policies more toward growth rather than solely concentrating on fiscal discipline. Monti called the measures a “proof of collective discipline,” and said the package would enable Italy to hold its head high as it faces the undeniably serious European crisis.

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