From Reuters:
Italy's government pledged on Tuesday to hike value added tax and introduce a constitutional balanced budget amendment as hundreds of thousands of people went on strike against an already widely criticized plan.
As market pressure on Italian bonds intensified, Prime Minister Silvio Berlusconi's center-right government yielded to demands to strengthen measures intended to balance the budget by 2013.
The 20 percent VAT bracket will be raised by one percentage point to 21 percent and a special 3 percent levy will be imposed on incomes of over 500,000 euros, a statement from Berlusconi's office said.
It also said ministers would approve the introduction into the constitution of a "golden rule" on balanced budgets and transfer provincial government functions to the regions in a move to simplify local administrations.
Other changes would delay retirement for women employed in the private sector from 2014.
A confidence vote will be called which should see the package passed in Senate on Wednesday, offering some reassurance ahead of Thursday's meeting of the European Central Bank governing council which has been pushing Rome for action.
As the government scrambled with the last minute changes to the package, protestors held rallies in around 100 towns and cities as part of a strike against the cuts called by Italy's largest union, the CGIL.
Protests in Italy have not matched the "indignados" demonstrations in Spain or the mass rallies in Syntagma Square in Athens but Tuesday's strike brought out simmering anger at the burdens imposed on ordinary Italians by more than a decade of economic stagnation.
Italy's strengthened measures came after a stark warning from President Giorgio Napolitano who said on Monday that markets had sent an "alarming signal" of the need for urgent action to restore faith in public finances.
http://www.reuters.com/article/2011/09/06/us-italy-austerity-protests-idUSTRE7852CG20110906
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