The upper house of Italy's Parliament, the Senate, has voted through the government's budget for next year. It was an important victory for Prime Minister Romano Prodi who has only a wafer thin majority in the Senate. The budget now goes to the lower house where Prodi enjoys a more comfortable majority.
It includes 11 billion euros of public spending cuts and a reduction in taxes for companies and home owners and renters. The hope is to trim next year's deficit to 2.2% of gross domestic product. The budget bill also introduces collective "class action" lawsuits to Italy's legal system for the first time.
The legislation now looks to be on track for approval by year's end as required by law, and for the moment Prodi's disparate coalition survives. The budget is supposed to marginally lower Italy's deficit thanks to an anticipated continuation of the unexpectedly strong tax revenues seen over the last 18 months, but critics of the fiscal plan say it will actually increase the deficit.
Italian government figures show that if these budget measures were not put into effect then - on present trends - the deficit next year would be 1.8% of GDP rather than the 2.2% anticipated by this legislation.
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