Italy puts forward economic plan
Italy's cabinet has proposed legislation to sell off government-owned real estate, encourage investment in infrastructure and privatise local public companies in a bid to avoid becoming the next victim of Europe's debt crisis.
The cabinet decided to draft the proposals as amendments to budget legislation under consideration by parliament that must be approved by the end of the year, according to a statement from premier Silvio Berlusconi's office.
They aim to convince international investors that Italy's government will be able to shoulder its debt and will not need a financial rescue like those required by Greece, Ireland and Portugal.
The fate of Italy is crucial to the wider 17-nation eurozone because it is the region's third-largest economy and would be too expensive to bail out if its borrowing rates rose so high as to block it out of bond markets.
Earlier, government officials had said the government might pass a decree containing some of the measures to show the EU and markets that Italy had taken solid action.
In the end, the cabinet decided to proceed on the legislative track, reportedly after Italy's president suggested the measures would enjoy greater legitimacy if passed by parliament.
A government official said key elements of the amendment include divesting government-owned real estate, privatising public companies, measures to encourage investment in infrastructure and liberalising the labour market.
Mr Berlusconi outlined such measures in a letter to the EU last week after coming under pressure from it and markets to come up with solid proposals to boost growth in Italy's anaemic economy. Doubts were growing that Mr Berlusconi had the political muscle to push reforms through.
Mr Berlusconi is to head to Cannes for the G20 summit of world leaders with the proposed legislation.
A big European plan unveiled last week sought to put a firewall around countries like Italy. But confidence in the country remains weak. Greece's announcement this week that it will hold a referendum on the European rescue triggered fresh turmoil on financial markets, adding market pressure on Italy.