Tuesday, August 7, 2012

Italy PM Monti wins confidence vote on extra spending cuts

ROME (Reuters) - Italian Prime Minister Mario Monti won a confidence vote on Tuesday on a bill to cut spending by an extra 4.5 billion euros ($5.59 billion) this year in order to rein in the deficit and delay a planned increase in sales tax.

Italy's Chamber of Deputies voted 403 to 86 to back Monti and pave the way for a final vote to convert the bill into law in the afternoon. A confidence vote was called to limit debate and accelerate the passage before the summer recess.

The expenditure reductions are in addition to the 10.5 billion in savings envisioned in Monti's austerity package, which was passed in December.

Savings from the cuts will increase to 10.9 billion euros in 2013, and 11.7 billion in 2014, and they will push back a 2-percentage-point increase in sales tax until July of next year.

The increase in sales tax rates - currently set at 10 percent and 21 percent - was due to take effect in October. Some 600 million euros will got to further reducing the deficit this year.

New cash-saving measures include reductions in health care spending and a gradual trimming of the number of workers employed in the public sector.

($1 = 0.8056 euros)

(Reporting by Steve Scherer)

Source: http://news.yahoo.com/italy-pm-monti-wins-confidence-vote-extra-spending-102423801.html

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