[ti:Italy Considers Budget Cuts, Rising Borrowing Costs]
[ar:Mario Ritter]
[al:Economics Report]
[by:www.21voa.com]
[00:00.00]This is the VOA Special English Economics Report.
[00:05.24]The economic situation in Italy is worrying investors
[00:10.88]and may have cost its prime minister his job.
[00:15.40]Like Greece, Italy is facing pressure
[00:18.94]to make unpopular cuts in government spending.
[00:22.84]Prime Minister Silvio Berlusconi
[00:26.04]has been seeking to enact measures 
[00:29.59]meant to satisfy his country's creditors.
[00:33.12]The interest rate Italy can expect to pay
[00:36.85]for borrowing money is increasing
[00:39.34]and recently passed seven percent.
[00:43.39]This week, Mister Berlusconi won a budget vote
[00:47.89]in Italy's lower house of parliament.
[00:50.38](SOUND)
[00:51.17]TRANSLATOR: Three-hundred-nine attending,
[00:52.92]three-hundred-eight in favor, one boycotted,
[00:57.08]no vote against the chamber approves..."
[00:59.93]But the prime minister lost something else.
[01:03.37]A majority of lawmakers 
[01:06.28]in the lower house refused to vote.
[01:09.55]It appeared Mister Berlusconi had lost their support.
[01:14.55]He announced on Tuesday that he would resign
[01:18.99]after parliament passes budget cutting measures.
[01:22.82]Italian government debt is about one hundred
[01:26.27]twenty percent the size of the country's economy.
[01:29.95]That is second only to Greece in Europe.
[01:33.64]Greece, Ireland and Portugal have all required
[01:38.68]rescue loans to help them pay creditors.
[01:42.71]But unlike those nations,
[01:45.05]Italy has the third largest economy using the euro.
[01:50.00]And it is among the ten largest economies in the world.
[01:56.08]On Monday, European Union Economic 
[02:00.39]and Monetary Affairs Commissioner Olli Rehn 
[02:03.84]said Italy needs to enact reforms.
[02:07.46]OLLI REHN: "[It is] essential now that Italy
[02:09.61]will stick to its fiscal targets,
[02:12.05]ensure their implementation
[02:14.94]and intensify the structural reforms
[02:18.23]that can boost growth and job creation."
[02:21.98]Unlike Greece,
[02:23.37]Italy's budget deficit is not out of control.
[02:27.36]Of greatest concern, however,
[02:29.90]is Italy's lack of growth and job creation.
[02:33.94]Financial officials and market watchers are also concerned
[02:39.37]that Italy's debt problems may be too big to solve
[02:43.66]for the seventeen nations using the euro.
[02:47.09]European leaders have yet to agree on the size
[02:51.78]and conditions of a rescue fund, or plan.
[02:55.67]In Brussels, Dutch Finance Minister Jan Kees de Jager 
[03:02.26]said the rescue fund needed to be bigger.
[03:04.56]But he said budget reform of euro nations was important, too.
[03:10.33]JAN KEES DE JAGER: "We have to increase
[03:11.49]the capacity of the emergency fund, that's very important,
[03:14.28]but it's not the only thing.
[03:15.52]Economic reforms and budget cuts in countries currently
[03:19.30]under attack of the financial markets are at least
[03:23.40]as important than more money in the emergency fund.''
[03:26.74]On Wednesday, Italian President Giorgio Napolitano
[03:30.62]named former European commissioner
[03:33.50]Mario Monti a Senator for life.
[03:36.95]Mister Monti is now considered a leading candidate
[03:41.54]to replace Mister Berlusconi.
[03:44.98]And that's the VOA Special English Economics Report.
[03:49.92]Follow us on Facebook and Twitter at VOA Learning English.
[03:55.54]I'm Mario Ritter.