Forex News – Monti faces confidence vote as he aims to push through austerity plan

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Italian Prime Minister Mario Monti is facing a confidence vote today in the Italian parliament as he hopes to push through his austerity plan before the end of the year. Monti unveiled a 30 billion-euro budget cutting package at the beginning of this month in an effort to reduce the indebted nation’s burgeoning debt.

Italy has the second largest debt burden in the euro zone area, which currently stands at 120 percent of Italy’s GDP. Italian bond yields have been surging recently to euro-era highs, pushing the government’s borrowing costs at unsustainable levels.

Before the actual confidence vote tonight, Italy’s Chamber of Deputies will first debate the package. Then after the vote takes place and if the austerity bill passes, Senate will have to approve it by December 23.

The austerity package includes cuts to pensions and increases taxes on primary residences.

Monti announced the vote in parliament on Thursday which resulted in proceedings in the lower chamber being disrupted by the rightwing Northern League party and forced the speaker of the house to temporarily suspend the session.

The budget plans are so far are being backed by the biggest political group, former prime minister Silvio Berlusconi’s People of Freedom Party.