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Italy’s government is calling for a deficit-fighting budget that includes a new tax to pave the way for integration with the European Union.
The budget agreement came Friday after a small but politically important communist party reversed its opposition, giving Prime Minister Romano Prodi’s center-Left coalition a majority in parliament’s lower house.
The Communist Refoundation Party had strongly opposed cuts in the pension and health-care systems. The government plans to trim $16 billion from those areas although precise targets were not announced.
The budget includes a $8.5 billion “Euro tax” intended to lower the deficit and put Italy in compliance with rules required for EU monetary union.
