Italian prime minister presents €30 billion budget plan

Italian PM tackles country's debt crisis
Italian PM tackles country's debt crisis

    JUST WATCHED

    Italian PM tackles country's debt crisis

MUST WATCH

Italian PM tackles country's debt crisis 05:25

Story highlights

  • The euro's future "depends on the decision," Prime Minister Mario Monti says
  • He tells lawmakers "painful" austerity measures are necessary to end Italy's crisis
  • "Without this package, Italy collapses," Monti tells reporters
  • Italian workers would retire later, receive less

Italy's new prime minister presented lawmakers with his proposal for €30 billion ($41 billion) in new taxes and spending cuts Monday, saying the "painful measures" would end the country's budget crisis.

"We are aware that the measures mean sacrifices. But not making the sacrifices today would mean making more painful ones in a few weeks, maybe even in a few days," Prime Minister Mario Monti told the lower house of Parliament Monday, a day after his Cabinet adopted what he has dubbed a "Save Italy" decree.

About €20 billion would come from cuts, including major changes to how Italian workers' pensions are calculated and a one-year increase in retirement ages, effective in January, Monti announced.

"We are in a very crucial week," Monti said Monday, adding that he was confident Parliament would back his plan to help Italy recover from the financial crisis that has also clouded the future of Europe's common currency.

"The future of the euro also depends on the decision we are undertaking. We are certain that Italy will not fail," he told lawmakers in the lower house.

The upper house of Parliament also heard Monti's proposal. Lawmakers were expected to vote later this month on the emergency decree.

"Without this package. Italy collapses. It will go to (the situation in) Greece. ... We have a strong sympathy for Greece, but we don't want to imitate them," Monti told reporters.

The rest of Monti's package involves a 1.5% tax on financial transactions, a new tax on high-end boats, cars and planes and efforts to crack down on tax evasion. It would cut provincial government costs while attempting to boost the Italian economy by rebuilding infrastructure.

Italians react to new austerity measures
Italians react to new austerity measures

    JUST WATCHED

    Italians react to new austerity measures

MUST WATCH

Italians react to new austerity measures 00:44

In announcing the cuts late Sunday, Monti -- who also serves as finance minister -- said he would take no salary for either position.

Can euro be saved?
Can euro be saved?

    JUST WATCHED

    Can euro be saved?

MUST WATCH

Can euro be saved? 01:33

The country's minimum pension of €500 won't be cut, Welfare Minister Elsa Fornero said. But Italian workers would see their pensions based on their entire salary history, rather than the last three years -- a move that could cut the average retiree's pension by about €100 ($135) per month.

How euro can be saved
How euro can be saved

    JUST WATCHED

    How euro can be saved

MUST WATCH

How euro can be saved 02:43

The announcement came after a weekend of difficult talks among political parties and with Italian labor unions, and Fornero began to cry as she announced the cuts. The package needs to be approved by Italy's Parliament.

Italy is the third-largest economy in the euro system and the largest bond issuer, with nearly €1.9 trillion in debt. It's the latest European country to face hard questions over its debt load, a crisis that has threatened to unravel the common currency for 17 European states.

Monti took office in November following the resignation of longtime premier Silvio Berlusconi, who was brought down by difficulties in pushing through budget cuts. He was the second European leader forced out by a debt crisis, along with Greece's George Papandreou.

Asian stocks 'held hostage' by EU crisis
Asian stocks 'held hostage' by EU crisis

    JUST WATCHED

    Asian stocks 'held hostage' by EU crisis

MUST WATCH

Asian stocks 'held hostage' by EU crisis 03:43

Monti, a former European Union commissioner, told his people the measures are necessary to "save Italy." He said Italians should blame him, not European Union leaders, for the cuts.

Bond yields threaten Italy's economy
Bond yields threaten Italy's economy

    JUST WATCHED

    Bond yields threaten Italy's economy

MUST WATCH

Bond yields threaten Italy's economy 01:17

"I will never ask Italians to take sacrifices because Europe is asking for them," he said. But he added, "I prefer criticism of me rather than Europe. Things can go on without me, not without Europe."

        Markets in crisis

      • German Chancellor Angela Merkel talks with Finance Minister Wolfgang Schaeuble during a session at the Bundestag (lower house of parliament) on June 25, 2013 in Berlin.

        Schaeuble: 'Don't see' bailouts

        German Finance Minister Wolfgang Schaeuble says the eurozone's problems are not solved, but "we are in a much better shape than we used to be some years ago."
      • IBIZA, SPAIN - AUGUST 21:  A man dives into the sea in Cala Salada beach on August 21, 2013 in Ibiza, Spain. The small island of Ibiza lies within the Balearics islands, off the coast of Spain. For many years Ibiza has had a reputation as a party destination. Each year thousands of young people gather to enjoy not only the hot weather and the beaches but also the array of clubs with international DJ's playing to vast audiences. Ibiza has also gained a reputation for drugs and concerns are now growing that the taking and trafficking of drugs is spiralling out of control.  (Photo by David Ramos/Getty Images)

        Spain keeps partying

        Summer could not have come soon enough for Lloret de Mar, a tourist resort north of Barcelona. Despite the country's troubles, it's partying.
      • The Euro logo is seen in front of the European Central bank ECB prior to the press conference following the meeting of the Governing Council in Frankfurt/Main, Germany, on April 4, 2013.

        OECD: Slow recovery for Europe

        The global recovery has two speeds: That of the stimulus-fed U.S. and that of the austerity-starved eurozone, according to a new report.
      • The flags of the countries which make up the European Union, outside the European Parliament in Strasbourg, France.

        Europe's new threat: Slow decay

        The "rich man's club" of Europe faces economic decay as it struggles to absorb Europe's "poor people", according to economic experts.
      • Packed beaches and Brit pubs? Not necessarily. Here's what drew travelers to one of Spain's most beautiful regions in the first place

        Spain aims for big tourist summer

        Spain's economic crisis is in its sixth straight year yet tourism, worth 11% of GDP, is holding its own, one of the few bright spots on a bleak horizon.
      • Photographer TTeixeira captured these images from a May Day protest in Porto, Portugal, Wednesday by demonstrators angered by economic austerity measures. "People protested with great order, but showed discontent against the government who they blame for this economic crisis," she said. "They want the government to resign and the Troika [European Commission, International Monetary Fund and European Central Bank] out of this country."

        May Day protesters flood Europe

        As European financial markets close for the spring celebration of May Day, protesters across Europe and beyond have taken to the streets to demonstrate.
      • Croatian Prime Minister Zoran Milanovic delivers a speech in Mostar, on April 9, 2013. Prime Ministers from Bosnia's neighboring countries arrived in Bosnia with their delegations to attend the opening ceremony of "Mostar 2013 Trade Fair".

        Croatia PM: We need Italy to recover

        As Croatia prepares to enter the 27-nation European Union, the country's Prime Minister says Italy must return to being the "powerhouse of Europe."
      • Anti-eviction activists and members of the Platform for Mortgage Victims (PAH) take part in a protest against the government's eviction laws in front of the Popular Party (PP) headquarters in Mallorca on April 23, 2013.

        Spain's unemployment hits record

        Spain's unemployment rate rose to a record high of 27.2% in the first quarter of 2013, the Spanish National Institute of Statistics said Thursday.
      • People protest against the Spanish laws on house evictions outside the Spanish parliament on February 12, 2013 in Madrid, Spain.

        Welcome to Madrid: City of protests

        Spain has seen hundreds of protests since the "Indignados" movement erupted in 2011, marches and sit-ins are now common sights in the capital.