LEAD: Italy austerity measures win final parliamentary nod

Dec 22, 2011, 15:29 GMT

Rome - Italian Prime Minister Mario Monti on Thursday won final parliamentary approval for austerity measures which he describes as only the first part of a strategy to relaunch the country's economy.

The upper house Senate voted 257 to 41 in favour of the technocratic government which had called for a vote of confidence to speed up the adoption of the measures.

Most of the 'no' votes came from the federalist Northern League - the junior partner in Silvio Berlusconi's former government - which opposes new taxes and pension reforms contained in the package.

The measures proposed by the government consist primarily of taxes including higher value added tax and a new levy on first homes - which Monti says are necessary to help the government balance reach its target of balancing the state budget by 2013.

'Their can be no growth without fiscal discipline,' Monti said during the, at times, rowdy Senate debate that preceded the confidence vote.

The premier, who heads a technocratic government, stressed that the measures were a taken with 'extreme urgency to ensure that Italy can hold up its head in facing Europe's financial crisis.'

Last week, the measures were comfortably adopted in a similar confidence vote held in the lower house Chamber of Deputies.

Monti's technocratic cabinet has the backing of parliament's two largest political groups - the conservative People of Freedom party of Silvio Berlusconi and the centre-left Democratic Party.

But some critics have lamented the scarce presence of structural reforms in the package, including instruments to liberalize sectors of the economy and the job market.

Monti, a former EU commissioner, has billed the government's 30-billion-euro (39-billion-dollar) austerity package a 'Save Italy' decree, and indicated that the government aims to include the structural reforms in a subsequent 'phase' of reforms.

'An enormous job still needs to be done to free the Italian economy from the breaks (holding it back), work that the government still intends to do ... with the help of parliament,' Monti said.

The premier is under pressure to tackle Italy's 1.9-trillion-euro public debt load, which is 20 per cent larger than its annual gross domestic product.

Italy's economy, the eurozone's third largest, contracted by 0.2 per cent in the third quarter and is expected to slide into a recession next year.