Italy to build 20,000 low cost homes - International Herald Tribune

Italy to build 20,000 low cost homes - International Herald Tribune

ROME: The government of Prime Minister Silvio Berlusconi introduced a multibillion-euro national housing plan for Italy on Wednesday, aimed at stimulating the economy after almost a decade of low growth.
About 20,000 new homes would be built for families on the cusp of poverty next year, Finance Minister Giulio Tremonti said. Italy is set to spend as much as €7 billion, or $11 billion, to build 100,000 units for low-income households with rents as low as €300 for about 50 square meters, or 538 square feet, of space.
The housing plan is directed as aid to consumers whose spending drives two-thirds of a $2.2 trillion economy and are struggling to cope with inflation and rising mortgage rates. Household confidence slumped this month to the lowest since 1993 as record food, housing and energy prices erode purchasing power.
Berlusconi's first act after taking office this month was to abolish a local property tax on first homes and offer to freeze mortgage payments for homeowners at risk of default. Tremonti said the government would also tax more of the profits of oil companies, dubbing it the "Robin Hood" tax, because it would use the proceeds toward social-welfare spending.
The Italian economy will expand 0.4 percent this year, the slowest pace since 2003, the Bank of Italy and the Institute for Studies and Economic Analyses said last month. That is even gloomier than the European Commission's forecast of 0.5 percent growth, which would make Italy the laggard among the world's advanced economies, defined as the Group of 7 countries and the 15 nations sharing the euro. Italy's growth rate has already trailed the European Union average for more than a decade.

Tremonti, in his last press conference before a monthlong summer break, reiterated the government's growth and deficit forecasts. The deficit will widen to 2.5 percent of gross domestic product this year from 1.9 percent last year, though the government says it expects to eliminate the shortfall by 2011.

Tremonti, in his last press conference before a monthlong summer break, reiterated the government's growth and deficit forecasts. The deficit will widen to 2.5 percent of gross domestic product this year from 1.9 percent last year, though the government says it expects to eliminate the shortfall by 2011.

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