Italy's parliament Wednesday gave final approval to an austerity package backed by the government of Prime Minister Silvio Berlusconi and deemed necessary by the European Union to allay market fears over Italy's huge public debt burden, dpa reported.
The lower house Chamber of deputies approved the 54-billion-euro (74-billion-dollar) package by a vote of 316-302.
Last week, Parliament's upper house, the Senate, approved the measures, also through a confidence vote.
The budget plan was originally presented by the government as a 45-billion-euro package in August, watered down in Parliament, then strengthened again by governmental decree earlier this month.
The bill envisages: raising value-added tax from 20 to 21 per cent; introducing a super-tax on high-earners; and raising the retirement age for women in the private sector to 65.
The so-called "rich tax" will see a surcharge of 3 per cent on earnings above 300,000 euros a year.
Yields, or the rate of interest the government has to pay lenders, on Italian government bonds have surged over the last two months amid market fears that the country will default on repayment of its public debt. In 2010, Italy's public debt amounted to 116 per cent of gross domestic product, making one of the world's highest.
Many analysts say that current borrowing costs are unsustainable for Italy, the eurozone's third largest economy.