ROME — Italy’s lower chamber of Parliament began deliberations Friday ahead of a confidence vote for the new technocratic government formed to save the country from its debt crisis.
On Thursday, Premier Mario Monti’s day-old government won a confidence vote 281-25 in the Senate after he warned that all Italians would need to make sacrifices to get the country out of its massive debt hole. Still he promised to fairly distribute the pain.
During that vote, anti-austerity rioters clashed with police in Rome, Milan and Turin, among other cities. No clashes were reported leading into Friday’s confidence vote in the Chamber of Deputies.
Monti was to speak ahead of the vote. Earlier, he greeted Pope Benedict XVI on the tarmac of Rome’s airport, where the pope left for a three-day trip to Africa. It was their first meeting since Monti was chosen to lead the country after Italy’s spiraling financial crisis felled Silvio Berlusconi’s 3 1/2-year-old government.
Monti is under enormous pressure to boost growth and bring down Italy’s high debt, not only to save Italy from succumbing to the debt crisis but to prevent a catastrophic disintegration of the common euro currency.
He said his strategy had three main pillars: Budgetary rigor, economic growth and social fairness. He pledged to reform the pension system, re-impose a tax on homes annulled by Berlusconi’s government, fight tax evasion, streamline civil court proceedings, get more women and youth into the work force and cut political costs.
“Europe is experiencing the most difficult days since the end of the Second World War,” Monti told parliament Thursday. “Let’s not fool ourselves, honored senators, that the European project can survive if the monetary union fails.”
Europe has already bailed out three small countries — Greece, Ireland and Portugal — but the Italian economy, the third-largest in the 17-nation eurozone, is too big for Europe to rescue. Borrowing costs on 10-year Italian bonds were at 6.75 percent Friday, after spiking briefly over 7 percent Thursday — a level that forced those other countries into bailouts.
In a conference call Thursday, German Chancellor Angela Merkel, French President Nicolas Sarkozy and Monti agreed that their countries have a special responsibility to the eurozone as its three largest economies and founding members of the European Union.
Still, it’s not clear how many sacrifices already-stressed Italians are willing or able to make. Students demonstrated across Italy under the banner: “Save the schools, not the banks.”
Monti’s ambitious plans overhaul just about every aspect of the Italian economy — from the organization of local governments to the selection process for teachers. Monti indicated he would seek to lower taxes on labor, while raising those on consumption. And he pledged measures — such as setting a limit on cash transactions — to tackle tax evasion, which he estimated is worth 20 percent of GDP.