Italian premier Mario Monti has called a cabinet meeting today to approve austerity and growth measures.
Mr Monti’s office said in a statement that the cabinet, originally scheduled to meet tomorrow, would convene later today.
The premier has been briefing political parties, unions, business groups and consumer lobbies on his plans over the weekend. He is scheduled to brief both houses of parliament on the measures tomorrow.
The head of Italy’s industrial lobby said the survival of the common euro currency depends on Italy coming up with very strong austerity and growth measures - followed by an effort at the European level so that Italian sacrifices are not in vain.
Mr Monti met unions earlier today to build support before the cabinet approves a €20 billion package of austerity measures aimed at shoring up Italy's strained finances and stemming a crisis that threatens to overwhelm the euro zone.
Expected measures include an increase in the retirement age for many workers, liberalisation of professional services, a hike in income tax for higher income brackets and new taxes on private assets and housing.
The measures come at the start of one of the most crucial weeks since the creation of the single currency more than a decade ago with European leaders due to meet on Thursday in Brussels to try to agree a broader rescue plan for the euro.
Italy, with a public debt of around 120 per cent of gross domestic product, has been at the centre of Europe's debt crisis since yields on its 10-year bonds shot up to around 7 per cent, similar to levels seen when countries such as Greece and Ireland were forced to seek a bailout.
Adoption of the package is seen as vital for re-establishing Italy's shattered credibility with financial markets after a series of unfulfilled promises by the previous centre-right government of former prime minister Silvio Berlusconi.
Unions said the cuts will hit poorer workers and pensioners hard but there was broad political support for Monti's plan, which is expected to be approved in parliament before Christmas.
"The choice isn't between a light package and a tough package, it's between a tough package today and the risk of bankruptcy for the country tomorrow," Angelino Alfano, secretary of the centre-right PDL party told SkyTG24 television.
With Italy, the euro zone's third-largest economy, close to a debt emergency that would destroy Europe's financial defences, EU leaders will meet in Brussels this week hoping to agree steps to bind the bloc more closely with tougher fiscal rules.
Sources present at discussions on the new fiscal measures said they would total around €20 billion.
An extra €4 billion would come from automatic cuts to tax breaks and welfare measures outlined but not clearly identified in the austerity package presented by the previous government.
Mr Monti will have to balance the competing needs of showing budget rigour while not choking off growth, without which it will be impossible to reduce a €1.8 trillion debt mountain.
Reuters