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Strikes rock Italian markets as workers rally against cuts


Some Fiat car plants were stopped

Some Fiat car plants were stopped


Some Fiat car plants were stopped

Italy's financial market jitters worsened as workers went on strike over government cuts while investors turned sceptical about an EU pact to save the euro.

Some Fiat car plants were stopped and a performance at La Scala opera house in Milan was cancelled as unions kicked off the first of days of walkouts and demonstrations.

Confidence was eroding yesterday, with Milan's stock index down 2% and the benchmark 10-year bond yield rising to 6.76%.

Italy did manage to raise €7bn (£6bn) in a bond auction, although the relatively strong demand was boosted by a bank association promotion waiving fees to buy the bonds.

Investors remain worried about the future of both Italy and the wider 17-nation eurozone despite the EU deal last week to tighten controls on spending. While that deal will boost longer-term budget discipline, it does little to lower current debt.

The Italian government's efforts aimed at stabilising Italy's finances to boost growth and lower debt, which stands at 120% of GDP, were coming under fire from unions.

Workers joined rallies and a nationwide strike in several labour sectors to protest pension reforms. It was the first in a series of walkouts called over the emergency austerity measures which Premier Mario Monti insists are vital to avert financial disaster.

Metalworkers, including on assembly lines at Fiat, were staging an eight-hour strike, while others were planning to walk off the job three hours before the end of the shift.

Also on strike were workers at La Scala, the Milan opera house that was forced to cancel a concert, and typographers at Italian newspapers and websites.

Public transport union leaders called walkouts for Thursday and Friday.

Other public sector employees were set to walk off the job on December 19, while bank workers have a strike called for Friday.

The union leaders say the government's austerity measures hit too hard at pensioners and workers and not hard enough at the wealthy.

In Genoa, hundreds of workers, joined by students protesting at school budget cuts, were marching toward a rally site.

Fiat workers joined hundreds of other blue-collar workers, students and youths in a march in Turin, hometown to the car maker, which is the country's largest private sector employer.

Italy is under pressure to cut its public debt amid worries that persistently high borrowing costs will make it unable to turn over the debt with new bonds.