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Italian Finance Minister Urges Balanced Budget Amendment

Italian Finance Minister Giulio Tremonti looks on prior to the start of a meeting at the Lower Chamber in Rome. Tremonti told lawmakers that tough and speedy measures are needed over the next two years to balance the budget in 2013, as pledged to the Euro

Italy's finance minister says tough economic measures will be needed to balance the budget by 2013, and urged a bipartisan meeting of parliament to make a balanced budget amendment part of the country's constitution.

Speaking to a joint session of the budget and constitutional affairs committees of Italy's lower house and Senate, Giulio Tremonti described measures that would be needed to cut the deficit. They include higher taxes, salary cuts to public officials, changes in the retirement age and moving some holidays to Sunday to increase productivity.

Tremonti noted that Italy's public debt, now at 120 percent of its gross domestic product, is "extraordinary" and shows that current laws governing the budget are not working.

With borrowing costs increasing, the finance minister said the tough measures will be necessary for Italy to make good on its pledge to balance its budget by 2013, a year earlier than expected.

Italian Prime Silvio Berlusconi made the pledge Friday night at a hastily called press conference, saying the government would also seek to win approval for a constitutional amendment requiring it to balance its annual budget.

Berlusconi's announcement came at the end of a week in which the interest rates on the country's bonds jumped markedly, increasing investor fears that Italy could be forced to join Greece, Ireland and Portugal in needing to secure international assistance to deal with its debt problems.

Some information for this report was provided by AP.