ROME, Aug 7 (Reuters) - Italian Prime Minister Mario Monti's
government on Tuesday won a confidence vote on 4.5 billion euros
($5.59 billion) in spending cuts for 2012, clearing the way for
a final vote on the package later in the day.
Compared with 2011 levels of state expenditure, savings
stemming from the package will increase to a cumulative 10.9
billion euros in 2013 and 11.7 billion euros in 2014.
The government aims to cut the budget deficit to 1.7 percent
of gross domestic product in 2012 from 3.9 percent in 2011,
seeking to convince markets Italy can manage its debt as the
country is shaken by the crisis in the euro zone.
VAT INCREASE POSTPONED
A planned increase in value added tax (VAT) to 12 percent
and 23 percent from current levels of 10 and 21 percent will
come into force in July 2013, rather than October 2012 as
EARLY PENSIONS FOR 'ESODATI'
The bill sets aside money to fund pensions for 55,000
so-called 'esodati', workers aged over 50 who agreed to take
early retirement during the downturn to help to reduce costs for
their companies, but who were left without a pension after Monti
reformed the pension system last year.
The law sets aside 1 billion euros in 2013 and 1 billion
euros in 2014 for areas damaged by earthquakes in May and June
10 PERCENT CUT IN PUBLIC OFFICIALS
The bill rules that the number of senior public servants
will be gradually reduced by 20 percent and ordinary public
employees by 10 percent.
CUTS TO MINISTRIES
Ministerial budgets will be cut by 1.5 billion euros in both
2013 and 2014, and by 1.6 billion euros in 2015, with over a
third coming from the Finance Ministry.
REGIONAL AND LOCAL REFORM
The bill aims to halve the number of provincial governments,
and cut 2.3 billion euros from regional and local government
budgets in 2012, 5.2 billion euros in 2013 and 5.5 billion euros
CUTS TO HEALTH SERVICE
The bill includes cumulative total cuts to the national
health fund of 900 million euros in 2012, 1.8 billion euros in
2013 and 2 billion euros in 2014. Eight regions that have
health-spending deficits will be allowed to increase a local
income tax to plug their spending gaps.
MONTE DEI PASCHI DI SIENA RESTRUCTURING
The bill allows Monte dei Paschi di Siena, the world's
oldest bank, to sell bonds to the Italian Treasury to boost
The law permits the ministry to buy up to 2 billion euros of
the bank's bonds in 2012.
SELLING OF STATE ASSETS
State-owned financial institutions Sace, Fintecna and Simest
will be sold to state-controlled holding company Cassa Depositi
e Prestiti, a financial manoeuvre which will help to reduce
public debt by about 10 billion euros.
($1 = 0.8056 euros)
(Reporting by Giuseppe Fonte and Naomi O'Leary; editing by