Italy approves cost cutting to tackle debt

After three years of low economic growth, falling international competitiveness and deteriorating public finances, Italy's centre-right government is charting a return to respectability with a rigorous cost-cutting 2005 budget. Silvio Berlusconi, Prime Minister, and his colleagues approved, July 2004, a four-year economic planning document (Documento di Programmazione Economico Finanziaria) that predicts a fall in the budget deficit to 1.2 per cent of gross domestic product in 2008 from 2.9 per cent this year, and a fall in the public debt to 98.1 per cent of GDP from 106 per cent.

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