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Italy agrees to more austerity

Thursday, December 22, 2011 - 01:53

Dec. 22 - The Italian parliament has definitively approved Prime Minister Mario Monti's 33 billion euro austerity package and he's urging Italians to buy their country's bonds. But economists warn the cuts could harm much-needed growth. Joanna Partridge reports.

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Italian Prime Minister Mario Monti finally sees his 33 billion euro austerity package definitively approved by the Italian parliament. Monti says Italy and its European neighbours now need to pursue growth. SOUNDBITE: ITALIAN PRIME MINISTER MARIO MONTI SAYING (Italian): "A more united Europe, in which member states commit to following strict regulations and are open to shared control, also needs to have greater solidarity, be closer to the needs of its citizens." Monti has argued restoring markets' confidence in Italy will help the rest of the euro zone. But the severe nature of his austerity package has seen his popularity rating fall to 46 percent from 61 percent the previous week, according to a poll published in an Italian newspaper. James Walston from the American University in Rome says he's not just facing pressure from opposition parties. SOUNDBITE: POLITICAL ANALYST JAMES WALSTON OF THE AMERICAN UNIVERSITY OF ROME SAYING (English): "Italian politicians are not free to do what they want. They have huge pressure from the markets. They have huge pressure from external forces and internal forces as well." Monti has called on Italians to buy their country's bonds to help the recovery. It was hoped some of the massive 489 billion euros European banks borrowed from the European Central Bank on Wednesday would be used to buy Italian and Spanish debt, as well as helping to prevent another credit crunch. Now managers at Italy's two top banks, Unicredit and Intesa Sanpaolo have told Italian newspapers they're going to use the loan to help fund Italian industry and families. Italian firms and citzens certainly need the help. Some economists warn the austerity pacakge will dampen the prospects for the economic growth that's so desperately needed. Joanna Partridge, Reuters

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Italy agrees to more austerity

Thursday, December 22, 2011 - 01:53