THE Italian Finance Minister, Mr Giulio Tremonti, is reported to have told a Parliamentary Commission that the Government is keen to hike tax rate on capital gains from 12.5% to 20% excluding investment in government bonds.

The FM said that he also wants to ease labour market laws and liberalise public services in an effort to reduce the public debt burden and balance the country‘s budget by 2013. Mr Tremonti stated that Italy's public debt, now at 120 percent of its gross domestic product, is "extraordinary" and shows that current laws regulating the budget have failed.

He said that tough steps are needed over the next two years to balance the budget by 2013. He noted that possible measures include privatizing local services, raising the tax on capital gains and immediately raising the retirement age for women in the private sector.