Italy ratifies EU treaty to battle debt crisis

(ROME) - Italy on Thursday gave its go-ahead to the EU bailout fund and became the eighth eurozone member to ratify the European fiscal pact, which imposes strict budget discipline to battle the debt crisis.

The treaty, which will take effect on January 1, 2013 as long as it is ratified by at least 12 eurozone members, was approved in the lower house of parliament with 380 votes in favour, 59 against and 36 abstentions.

In Italy, only the populist Northern League party, which was in a coalition government under Silvio Berlusconi until November last year, voted against the ESM and the fiscal pact while the centre-left Italy of Values party abstained.

At an earlier vote on the treaty, Northern League senators had held up a banner reading: "Yes to a Europe of peoples, No to a Europe of banks."

Lawmakers also approved establishing the European Stability Mechanism, the EU bailout fund, with 325 in favour, 53 against and 36 abstentions.

The fund needs Germany's green light to come into being. Originally set to come into force on July 1, the launch has already been substantially delayed.

It will now have to wait until at least September 12, when Germany's top court will rule whether the German president can sign the ESM into law.

The fiscal pact was approved by all EU leaders minus Britain and the Czech Republic. Thursday's vote also made Italy the 12th European Union member state -- including both eurozone and non-eurozone states -- to ratify it.

The pact aims to enforce stricter budgetary rules in the bloc and prevent the high public deficits that touched off the eurozone turmoil.