Nov. 22 (Bloomberg) -- Italy’s Lower House of Parliament approved the government’s budget law, setting up a final vote in the Senate that will remove a hurdle for setting the date of early elections.
Lawmakers voted 372 to 73 in favor of the measure. Today’s ballot came after Prime Minister Mario Monti’s government won three confidence votes yesterday on the plan as lawmakers rush to clear the legislative agenda.
President Giorgio Napolitano said last week that he would consider a request to set early election for March 10 once Parliament passed the budget law and adopted a revamp of voting rules.
The budget package, which is crucial for the government to bring its deficit to 1.8 percent of gross domestic product next year, includes a 1 percentage point increase in the highest value-added tax rate starting from July. A previous plan to reduce the two lowest income tax brackets was replaced last month with a reduction of payroll taxes paid by employers.
With unemployment at a record high and an economy that is mired in its fourth recession since 2001, Monti has been under growing pressure to do more to stimulate growth. The European Commission forecasts this month that the Italian economy will shrink 2.3 percent and contract 0.5 percent in 2013.
Italy’s economy shrank less than economists forecast in the quarter through September. GDP declined 0.2 percent from the second quarter, when it decreased a revised 0.7 percent, the National Statistics Institute Istat said in a preliminary report Nov. 15.
The government reached yesterday an agreement with unions and employers to pass measures to boost productivity, even though the Cgil, the country’s biggest union, rejected the deal.
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