July 14 - The Italian austerity budget worth nearly 48 billion euros has been approved by the upper house of parliament, overcoming its first parliamentary hurdle. Sonia Legg reports.
They're used to political turmoil in Italy but the current economic crisis isn't so familiar. A new austerity package has passed its first hurdle in parliament. It's designed to balance the country's budget by 2014. Most politicans and many voters accept it's necessary. (SOUNDBITE) (Italian) ROME RESIDENT DANILO FAZI, SAYING: "I think Italy is a stable country, I don't think the package is a bad one, we just had a shaky moment at the stock exchange, I feel pretty positive." (SOUNDBITE) (Italian) ROME RESIDENT JACOPO CAPRONI, SAYING: "One thing is to be worried, another is to be afraid. I might feel worried to a certain extent, but certainly not afraid." The cuts worth 48 billlion euros are far from popular, but market tensions remain high. Italy has just had to pay the highest interest rates on debt in three years. Finance Minister Giulio Tremonti says the austerity measures are vital. (SOUNDBITE) (Italian) ECONOMY MINISTER GIULIO TREMONTI SAYING: 'No one writes a budget such as this without wanting the common good. Without balancing the books, the public debt is a monster that will come from our past, and devour our future." There's growing anger about the role of ratings agencies in the debt crisis - Greece has just been hit by yet another downgrade. (SOUNDBITE) (Italian) ECONOMY MINISTER GIULIO TREMONTI SAYING: 'The Greek economy is equivalent to only about three percent of the European economy but its relevance at the moment is much greater. We are living a paradox. The Euro zone is objectively the richest and least in debt area in the world but the perception that the financial markets have does not reflect this.' It's the gap between the indebted and not so indebted which is the problem in the euro zone. Ireland - another struggler - has just been told it probably has enough funding to see it through to the end of 2013. There had been fears that it might follow Greece into needing a second bailout. Long-term that can't be ruled out - and at the moment that can also be said about many scenarios facing the euro zone. Sonia Legg, Reuters.