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Italy PM says cabinet to pass 'vast' reform package Monday, including quick action to cut debt
ROME (AP) ' Italy's Cabinet on Monday will approve a wide-ranging package of urgent debt-reducing measures and long-term structural reforms to encourage economic growth, Premier Mario Monti said.
Monti spoke to reporters Wednesday in Brussels after the eurozone's 17 finance ministers put off major decisions on saving their common currency until next week's gathering of EU leaders.
Monti said he will give details of the austerity and growth measures after the Cabinet approval, and urged unions and lawmakers to act responsibly in reacting to reforms to Italy's bloated pension system.
"If Italy misses this, or does less than what is expected, the consequences will be very serious for all," he said, adding that he had reiterated to EU officials Italy's commitment to balancing its budget by 2013.
Monti is under tremendous pressure to push reforms through Parliament to rein in Italy's euro1.9 trillion ($2.6 trillion) in debt ' some 120 percent of its GDP ' and boost its anemic growth. As the eurozone's third-largest economy, Italy considered to be too big to be bailed out like smaller nations Greece, Ireland and Portugal have already been.
An Italian default would create devastating consequences for Europe and send shockwaves throughout the global economy.
Monti, an economist and university chief, came into office in November after international markets lost confidence in Silvio Berlusconi's ability to push through reforms.
Italy's lower chamber of Parliament was voting later Wednesday on articles of a constitutional amendment to balance the budget, the first of several readings it must have before full passage.
Monti's strategy focuses on budgetary rigor, economic growth and social fairness. It includes reviving a property tax for homeowners, revamping the pension system, opening up now closed professions that discourage competition, cutting political costs, simplifying bureaucracy and selling off state assets.
Additional structural reforms to boost growth, he said, are designed to also address the country's debt so "even with a possible deterioration of the economic cycle that might be greater than foreseen, the objective of our public finances that we're committed to is guaranteed."