Berlusconi, Sarkozy discuss Italian austerity plan

14th August 2011, Comments 0 comments

Italy's Prime Minister Silvio Berlusconi Sunday outlined his government's austerity programme adopted to tackle the debt crisis facing the eurozone's third-largest economy to French President Nicolas Sarkozy.

The two had a "long and friendly conversation" on the telephone, Berlusconi's office said in a statement.

The Italian leader "explained to his counterpart the substance of the austerity plan approved Friday by the cabinet and in particular underscored the manner in which the adopted measures will allow for the achievement of a balanced budget by 2013," the statement said.

Italy's cabinet signed off Friday on a 45.5-billion-euro ($64.8-billion) austerity budget -- its second in weeks in a bid to calm investors worried Italy could follow Greece, Ireland and Portugal into a debt spiral.

Finance Minister Giulio Tremonti said the measures would reduce the budget deficit to 1.4 percent of output by 2012, and to zero by 2013, and the package must still go to parliament for final approval.

The plan includes a five-percent tax for two years on people with an income of between 90,000 euros and 150,000 euros a year, and 10-percent on those earning more than 150,000 euros, Berlusconi said Friday.

He also said he was devastated the plan violated an election promise to never raise taxes, but argued the panic sell-offs seen on Italian financial markets last week left him with no choice.

"President Sarkozy expressed his appreciation for the austerity measures adopted by the government," according to the statement.

© 2011 AFP

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