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ECONOMICS > Italian MPs approve budget cuts

ROME/BRUSSELS - Agence France-Presse

Italian lawmakers say ‘yes’ to an unpopular austerity package which is expected to go into effect by the start of 2013. The eurozone’s current account surplus has grown to 10.9 billion euros, which is good news for the bloc as it struggles under debt

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alian workers demonstrate against the government’s austerity measures in a protest organized by leading trade unions in Rome over the weekend. The Italian government will attempt to implement the planned budget cuts. EPA photo

alian workers demonstrate against the government’s austerity measures in a protest organized by leading trade unions in Rome over the weekend. The Italian government will attempt to implement the planned budget cuts. EPA photo

Italy’s parliament ratified yesterday the European fiscal pact, which imposes strict budget discipline on its signatories in a bid to resolve the eurozone debt crisis. The treaty, which will take effect on Jan. 1, 2013 as long as it is ratified by at least 12 European Union member states, was approved with 380 votes in favor, 59 against and 36 abstentions.

Only the populist Northern League party, which was in a coalition government under Silvio Berlusconi until November last year, voted against while the centre-left Italy of Values party abstained.

‘No to Italy of banks’

At an earlier vote on the treaty, Northern League senators had held up a banner reading: “Yes to a Europe of peoples, No to a Europe of banks.” The treaty was approved by all EU leaders minus Britain and the Czech Republic.

The pact aims to enforce stricter budgetary rules in the bloc and prevent the high public deficits that touched off the eurozone turmoil.

The eurozone’s current account surplus grew to 10.9 billion euros ($13.4 billion) in May from 5.5 billion euros the previous month, European Central Bank data showed yesterday. The current account on the balance of payments, which includes imports and exports in both goods and services plus all other current transfers, is a closely tracked indicator of the ability of a country or area to pay its way in the world.

It is crucial for the long-term confidence of investors and trading partners. Over the 12 months to May, the current account showed a surplus of 36.3 billion euros, compared with a deficit of 17.0 billion euros in the corresponding period a year earlier, the data showed.

However, the anger against austerity measures in several eurozone nations is growing. Separately, Spanish workers yesterday were planning the biggest protests yet against what they call “robbery” under the latest pay cuts and tax hikes imposed to tackle Spain’s financial emergency. The protests would start in the evening by local time, which was before the Daily News went to print yesterday.

The two main labor unions UGT and CCOO said they planned more than 80 demonstrations by public sector workers across the country on Thursday evening, with the flagship Madrid march.

Smaller protests, organized largely via online social networks, have occurred daily since the latest measures were announced on July 11, with some workers coming into the street during their morning coffee break.

July/20/2012

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