Italian Workers Stage General Strike Amid Austerity Debate

Posted September 6th, 2011 at 6:30 am (UTC-5)
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Millions of workers across Italy walked off their jobs Tuesday to protest the government's massive austerity package.

The eight-hour general strike called by the CGIL, Italy's largest union, is expected to disrupt most forms of transportation and manufacturing across the country. The strike is taking place as the Italian parliament begins debate on a $65 billion austerity plan drafted by Prime Minister Silvio Berlusconi that aims to balance the government's budget by 2013.

The measure calls for cuts in government spending, tax increases plus a crackdown on property tax evaders and an increase in the retirement age. It is expected to be approved by the Italian Senate on Wednesday. It is expected to pass the lower Chamber of Deputies around mid-September.

The contagion over the eurozone debt crisis has spread to Italy, prompting the European Central Bank to buy Italian bonds to hold down yields and keep borrowing costs from reaching unsustainable levels.

But yields on Italian bonds rose Monday to above 5 percent due to the chaotic manner in which the austerity package has been handled.

Mr. Berlusconi's cabinet has revamped the package a number of times since it was first introduced last month. It has dropped a proposed special tax on high income earners, plus a cut in funding to local governments.