ROME: Italy's Senate definitively approved a constitutional amendment on Tuesday that will bind governments to running balanced budgets from 2014 onwards unless an exception is sanctioned by a vote in parliament.
The amendment, approved by 235 votes to 11, was proposed by the government of former prime minister Silvio Berlusconi and backed by Mario Monti's technocrat administration, which took office in November.
It is part of a series of measures aimed at calming market fears over the stability of Italy's public finances and its ability to service its 1.9 trillion euro public debt.
It also follows a German-inspired pact for stricter budget discipline agreed by most EU member states earlier this year.
The new Article 81 of the Constitution stipulates that the state budget must maintain "balance between revenues and spending, keeping in mind averse and favourable phases within the economic cycle."
Governments will be able to run a deficit only in exceptional circumstances and will require the authorisation of parliament.
The law approved on Tuesday also establishes a new authority to monitor the state budget similar to the Congressional Budget Office in the United States.
Italy is set to delay by a year its current plan to balance its budget in 2013, however, according to a draft forecasting document to be approved by the cabinet on Wednesday.
The International Monetary Fund said on Tuesday it expected Italy's deficit would fall to 2.4 percent of output in 2012 and decline to 1.5 percent in 2013.
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