A day earlier than expected, Italy’s Prime Minister has announced emergency austerity measures aimed at saving 20 billion euros.
There will be a crackdown on tax evasion as well as higher taxes on assets owned by wealthy people.
As part of cutting the cost of politics, Mario Monti said he would give up his salary as premiere.
The measures agreed at an emergency cabinet meeting on Sunday still need to go before parliament for approval on Monday.
On Thursday, Monti will meet with other eurozone leaders in Brussels to discuss rescuing the euro.
Making his address, Monti said: “While taking these steps, at the same time we’ve thought about the need to create the conditions for growth in Italy. So we must strongly control the deficit and debt. We must not be seen as a source of infection in Europe, but once again as a source of strength.”
An emotional Social Affairs Minister had to be helped by Monti when revealing changes to pensions that see the ages rise for men and women to 66 and 62 respectively.
“The pension system is a long mechanism between the generations so we need it, and it costs us even psychologically, so we have to ask a…,” said Elsa Fornero, breaking off in tears.
Unable to finish her sentence, Monti told reporters that Fornero wanted to ask for a sacrifice.
Unions are angry that plans for a one-off wealth tax have been scrapped.
Even those who will not be affected by pensions now still have cause for complaint – Italy has the lowest youth employment rate in the eurozone.