Italian Prime Minister Mario Monti announces austerity measures which followed the cabinet's approval of a mix of tax hikes, pension reforms and incentives to boost growth.
The measures come ahead of a crucial week since the Euro creation, as EU leaders are due to meet to agree a broader rescue plan for the bloc.
(SOUNDBITE) ITALIAN PRIME MINISTER, MARIO MONTI, SAYING (Italian):
"We want to have the Italian economy recover, we want to give Italy back a great weight in the international scene and particularly in Europe. We also want to help politics, that we respect, to restore a more serene relationship with public opinion because a country needs good politics."
Showing the emotional impact of the cuts, Italian welfare minister broke into tears while presenting measures that will mean an effective cut in income for many pensioners.
Italy has been at the centre of the crisis since mid-year, when its borrowing costs began to approach the levels which forced Ireland, Greece and Portugal to seek an international bailout.
Marie-Claire Fennessy, Reuters
