Rome - AFP
Italy's lower house of parliament formally approved Prime Minister Mario Monti's austerity package on Friday after he won a vote of confidence on the measures aimed at speeding up implementation. The plan, intended to balance the budget by 2013 in a bid to reassure skittish markets, is set to go to a vote in the upper house next week and be adopted just before Christmas despite strong opposition from the unions. The former eurocrat's crisis-busting plan, which was approved by the cabinet on December 4, aims to reduce the deficit by around 20 billion euros ($25 billion) and includes measures worth over 10 billion euros to boost growth. "We all have the same aim at heart: to work for Italy's good. If we do our duty, I have no doubt Italy will be saved," Monti told members of parliament. "An Italy with its public finances in order will make its voice heard in Europe," he said. "Without this intervention, the savings of Italians are at risk," he added. Monti stressed that unlike recent austerity measures, his measures were also structural, for example with pension reform and a crackdown on tax evasion. The lower house voted overwhelmingly in favour of the package with the exception of the right-wing Northern League -- former premier Silvio Berlusconi's coalition partner -- and the centre-left Italy of Values party. The party's head -- former anti-corruption judge Antonio Di Pietro -- said the plan was "unjust" and "makes pensioners pay rather than financial lobbies." Monti, who stepped in after Berlusconi was ousted in November, is under pressure from his European partners to reduce Italy's huge debt burden but also to kick-start growth to stave off the debt crisis sweeping the eurozone. Fitch Ratings agency said Friday it was reviewing the credit ratings of six eurozone countries, including Italy, which could see its A+ rating downgraded. EU euro commissioner Olli Rehn told journalists in Brussels that the measures were "convincing" but there was "lots to do still on growth and jobs." In reforms to pensions -- which have triggered a series of strikes -- the minimum number of years that workers have to pay contributions will be increased from the current 40 years to 41 for women and 42 for men. The minium pension age for women in the private sector also rises from 60 to 62 in 2012 and then up to 66 by 2018. A tax on first homes, abolished by Berlusconi in 2008, will be reintroduced and taxes will increase on all real estate. However contributions from lower-income households and families with children will be weighted so that they shoulder less of the burden. The government will balance the loss by taxing pensions worth over 200,000 euros a year, and raising the tax on capital previously stashed in offshore accounts and now regularised as part of a tax amnesty under Berlusconi's rule. The plan also includes incentives for growth: companies that hire women and young people will be rewarded with a reduction in their social welfare costs and small and medium-sized enterprises will get easier financing. Faced with opposition from some political parties over the draconian plan, Monti has insisted it is fair, but has said that Italians will have to tighten their belts to pull through an "extreme" financial emergency. Berlusconi and his former ally Umberto Bossi, the head of the League, voiced doubts Friday over whether Monti could stay out his mandate until 2013. The main unions held a transport strike against funding cuts, with metros, trains and buses running little or no service in cities across Italy. A group calling itself the Armed Proletarian Movement also sent letters containing bullets to Monti and Berlusconi -- intercepted by the police -- with a note reading "Reconsider the austerity plan or we'll make you pay." Despite the rush to implement the new measures, market pressure has remained high and Rome was forced to pay record rates in a bond sale this week. While acknowledging the need for budget discipline among EU member states, Monti called on the European Union on Friday to make sure it was enforced in a "sustainable" long-term way which would not stifle growth. An IMF team will travel to Rome next week amid ongoing speculation that it may be called upon to use hundreds of billions of dollars along with the ECB to rescue Italy if it becomes unable to service its huge sovereign debt -- which stands at 120 percent of the gross domestic product.