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Italian union threatens strike move

The leader of Italy's largest union is threatening a general strike against an austerity package that premier Silvio Berlusconi's government pushed through to balance the budget by 2013 and avoid financial collapse.

The move came amid mounting criticism of the 45.5 billion euro (£39.8 billion) package passed on Friday in response to demands by the European Central Bank (ECB).

Critics say the package - a mix of spending cuts, job cuts and tax increases - will strangle Italy's stagnant economy, which is now expected to grow by only about 1% this year.

Other critics, including nine members of Berlusconi's own coalition, say it unfairly targets the middle class and fails to tackle Italy's massive tax evasion problem.

Susanna Camusso, leader of the CGIL labour union, criticised measures aimed at the labour market and pension system, saying a strike is the only way to "change the inequity of this package".

She told the La Repubblica newspaper that union officials will meet on August 23 to set a strike date and invited other unions to join. At least one other union, CISL, said it will not take part in the protest, although it said the package needed to be improved.

The new measures include 20 billion euro (£17.5 billion) in cuts and tax hikes for 2012 and 25.5 billion euro (£22.3 billion) for 2013.

Citizens face a 5% additional tax on income above 90,000 euro (£78,000) and a 10% additional tax on income above 150,000 euro (£131,000) for the next three years.

Both Berlusconi and finance minister Giulio Tremonti have defended the government's actions.

Tremonti insisted the debt crisis could not have been predicted but said it could have been avoided with the creation of Eurobonds, a new joint bond backed by all 17 countries using the euro.

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