Italy government wins confidence vote on growth package

Prime Minister Silvio Berlusconi's government won a parliamentary vote of confidence on Wednesday on a contested package of measures aimed at energising Italy's chronically weak economy. The Action Plan for Growth, which has a zero net cost for the struggling state coffers, was approved by 165 votes to 112 in the upper house of parliament and must now go before the lower house for final ratification. Italy's economy has underperformed the euro zone average in 9 out of the last 10 years and a recent slew of data suggests the situation is getting even worse as business morale slumps.
Berlusconi is desperate to revive the economy ahead of a 2006 general election and says his wide-ranging package will help speed up a long-awaited recovery.
The plan includes measures to protect industry from cheap imports, cut red tape, make it easier to start a business, offer incentives for company mergers, streamline bankruptcy laws, reform welfare provisions and crack down on counterfeiters.
It also gives the green light for an Italo-French project to build 27 frigates, including 10 for the Italian navy.
Unions say the package will have minimal impact because it lacks financing. Centre-left opposition politicians say it will encourage struggling businesses to file for bankruptcy and open the door to corporate fraudsters.
Given the weight of criticism, the government ordered the confidence vote to sweep aside all amendments. It is expected to use the same device in the lower house later this month.
Berlusconi has frequently resorted to the confidence vote over the past four years to ram legislation through a recalcitrant parliament. If the government loses such a vote it must automatically resign.
The hidebound economy has damaged Berlusconi's standing in the opinion polls and his coalition was thrown into tumult last month after it was trounced in local elections.
The resulting fallout within his cabinet forced the prime minister to resign and put together a new government team, with economic regeneration at the top of its agenda.