Italian cabinet to meet Friday on austerity package

ROME, Aug 12, 2011 (AFP) - The Italian cabinet will meet Friday at 5:00 pm (1900 GMT) amid calls for the speedy adoption of a new austerity package, official sources said.

Finance Minister Giulio Tremonti told lawmakers on Thursday that Italy needed "very strong" austerity measures after he returned early from vacation amid efforts to shield Italy from plunging into a debt crisis.

Tremonti said Italy had been forced to speed up budget cuts -- with the aim now of achieving a balanced budget by 2013 instead of 2014 as previously planned.

Earlier, Italian market regulators announced a 15-day ban on stock market short-selling of financial sector shares in a bid to stem market turbulence.

The move comes after European regulators said on Thursday the speculative practice would be restricted in four France, Italy, Spain and Belgium.

France said short-selling of 11 financial sector shares would be banned for two weeks.

Italy's stock market regulator, which announced the ban on short-selling, said that the move had been introduced to tackle "extraordinary conditions of the market in August 2011 characterised by a significant rise in volatility."

It said the ban affected 29 financial stocks of banks and insurance companies.

The Milan stock market key index, which lost 2.5 percent in early trade, firmed following the announcement of the ban, with bank shares notably getting a boost.

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