Friday, July 07, 2006

Italian cabinet approves deficit reduction measure

The Italian Cabinet has approved a deficit reduction measure emphasizing spending cuts rather than tax increases, designed to stablize the economy and bring the deficit below 3 percent of GNP as required by international agreements. The Government is further committed to reducing the "tax wedge," i.e., the cumulative effect of taxes and contributions on hiring decisions, although it was somewhat vague as to how this would be achieved. A taxi strike, in response to the Government's efforts to liberalize transportation and other sectors, was provisionally settled early this week.


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