Italy's Prime Minister $40 Billion 'Save Italy' Plan

Italy's Prime Minister Mario Monti on Monday must persuade lawmakers to pass a giant reform package aimed at reducing debt and balancing the country's budget. The $40 billion package includes hikes in taxes, cuts in pensions, an increase in the retirement age, and measures to reduce tax evasion.

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STEVE INSKEEP, HOST:

NPR's business news starts with an effort to save Italy. Italy's Prime Minister Mario Monti today must persuade lawmakers to pass a giant reform package aimed at reducing debt, balancing the country's budget and reassure financial markets that have been driving up interest rates for Italian bonds. This package includes tax hikes, cuts in pensions, an increase in the retirement age and measures to reduce tax evasion, among other changes.

Italy is one of the largest economies in the eurozone, but has now caught up in the debt crisis. Investors have become fearful of Italy's debt levels and have shied away from Italian government bonds making it more expensive to borrow.

Monti unveiled his proposals yesterday during a news conference and told Italians that his Save Italy plan is critical for the country and for the euro.

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