Saturday, August 13, 2011

45 billion euro plan aims to balance Italy's budget


Italy has announced a fresh round of austerity measures after an emergency cabinet meeting. The 45 billion euro plan aims to balance Italy's budget by 2013, a year earlier than had been planned by slashing public spending and jobs. Prime Minister Silvio Berlusconi said the measures were painful but unavoidable.

On Monday the European Central Bank announced it would buy Italian debt in a successful effort to lower its cost of borrowing. The new measures come on top of a previous round of spending cuts announced in July which aimed to balance the budget by 2014. Italy's borrowing costs rose sharply before the move as investors lost confidence in the government's ability to reduce its deficit.

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