Italy approves austerity package

The Italian government approved, in an extraordinary cabinet meeting held on Friday, 45 billion euro austerity package to help balance its budget by 2013. In a press conference held after the meeting, Italian Prime Minister Silvio Berlusconi and Giulio Tremonti both highlighted the measures that could save 20 billion euro in 2012 and another 25.5 billion euro in 1013. Berlusconi described these astringent measures as "fair and respond to the European Central Bank's requests" to cut the public debt that was caused by a drastic sell-off of Italian stocks and bonds over the past month. "The new economic measures are more balanced," he said, noting that "they will include not only cuts in public expenditure but also tax imposition." On the other hand, Tremonti said that some of the measures, which will be announced in details later, include an extraordinary "solidarity" tax for high-earners. Anyone with an income over 90,000 eruo a year will be assessed an additional 5 percent tax in each of the next two years. The rate will be 10 percent for incomes over 150,000 euro. They will also abolish public administrations of towns with fewer than 1, 000 residents, impose cuts in ministry personnel salaries and perks totaling 6 billion euro and gradually raising the retirement age for women in private sector jobs.