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Italy's largest union threatens strike

Opposes Berlusconi's new austerity package saying it will strangle stagnant economy

Gulf News

Rome: The leader of Italy's largest union is threatening a general strike against an austerity package that Premier Silvio Berlusconi's government hastily pushed through to balance the budget by 2013 and avoid financial collapse.

The threat came amid mounting criticism yesterday of the €45.5 billion (Dh238 billion) package passed Friday in response to demands by the European Central Bank.

Critics say the package — a mix of spending cuts, job cuts and tax increases, including a "solidarity tax" for high-earners — will strangle Italy's stagnant economy, which is now expected to grow by only about one per cent this year.

Other critics, including nine members of Berlusconi's own coalition, say it unfairly targets the middle class and fails to tackle Italy's massive tax evasion problem.

Susanna Camusso, leader of the CGIL labour union, criticised measures aimed at liberalising Italy's labour market and targeting its pension system, saying a strike is the only way to "change the inequity of this package."

She told the La Repubblica newspaper that union officials will meet August 23 to set a strike date and invited other unions to join.

At least one other union, CISL, said it will not take part in the protest, although it said the package needed to be improved. The new measures include €20 billion (Dh104 billion) in cuts and tax hikes for 2012 and €25.5 billion (Dh1,333 billion) for 2013.

They abolish some local government layers and gradually eliminate some 50,000 elected jobs — leading to fierce protests by local officials.

Citizens face a five per cent additional tax on income above €90,000 (Dh471,012) and a ten per cent additional tax on income above €150,000 (Dh785,021) for the next three years.


Both Berlusconi and his finance minister, Giulio Tremonti, have defended the government's actions. Tremonti insisted the debt crisis could not have been predicted but said it could have been avoided with the creation of Eurobonds, a new joint bond backed by all 17 countries using the euro.

"We wouldn't have gotten here if we had had Eurobonds," Tremonti told reporters, calling for more "integration and consolidation of public finances in Europe."

Germany, the strongest economy in the eurozone, has rejected the Eurobond idea.

Berlusconi called Italy's new austerity measures fair and said they had won praise from the European Central Bank and leaders including German Chancellor Angela Merkel.