Italian Cabinet Fails to Reach Consensus On Financial reforms

Posted November 2nd, 2011 at 9:50 pm (UTC-5)
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Italy’s cabinet has held an emergency meeting on ways to accelerate budget reforms and avert a major financial crisis.

Italy’s prime Minister Silvio Berlusconi is expected to face intense pressure from G20 leaders to produce a set of concrete reforms to stop financial markets from targeting Italian bonds. Italy’s borrowing rates are increasing as a result of market turmoil in the eurozone, caused by Greece.

Mr. Berlusconi held meetings with senior officials and ministers ahead of the cabinet meeting, but could not get them to reach a consensus on an emergency decree that he could present at the upcoming G20 summit.

The official statement said the cabinet had examined a set of government measures to avert financial crisis and had approved an amendment to the budget, but no details were revealed.

There was no agreement either on the contentious issues such as labor market reform or a tax on the wealthy.

The prime minister has been criticized over his handling of the Italian financial crisis and his failure to pass decisive economic reforms.

Mr. Berlusconi has said that Italy is applying solutions that will help the country cut its deficit by 2013. But Italy’s public debt is equivalent to 120 percent of gross domestic product and its economic growth is sluggish.

After Greece, Italy and Spain are the most threatened by the financial crisis in the eurozone.