VAT, retirement age rise in Italian plan to save the euro
PM Monti renounces his salary
Italy's cabinet has adopted a far-reaching austerity programme including taxes on housing and luxury items and major pension reforms in a bid to avoid bankruptcy and preserve the eurozone.
The programme is estimated at €20 billion by 2014 but also includes €10 billion in additional spending to boost growth.
The plan, which will be outlined in more detail today, is expected to receive final approval in parliament before the Christmas holidays.
Here are the main measures that are being proposed:
-- PENSIONS: The minimum number of years that workers have to pay their contributions in order to receive their full pensions will be increased from the current 40 years to 41 years for women and 42 years for men.
For women in the private sector, the minimum pension age will go up from 60 to 62 in 2012 and then up to 66 in 2018 instead of 2026 as previously planned.
All pensions except the lowest will not be indexed to inflation in 2012 and 2013 and there will be greater flexibility to allow people to work until 70.
-- HOUSING TAX: A tax on principal residences, which was abolished in 2008, will be re-introduced.
-- LUXURY TAX: Luxury items including high-powered cars, yachts and private jets will be taxed.
-- VAT: Value-added tax, already raised by one percentage point this year, will be increased 21 percent to 23 percent next year "if necessary".
-- BUDGET CUTS: Government agencies and provincial administrations will be reduced. Prime Minister Mario Monti said he would also renounce his salary.
-- LEVY: Capital brought back to Italy under an amnesty introduced by Italy's previous government will be taxed at 1.5 percent.
-- INCENTIVES: Companies that hire women and young people will be rewarded with a reduction in their social welfare costs. There will also be measures to guarantee loans for small and medium-sized enterprises.
Prime Minister Mario Monti also said he was waiving his salary while the crisis persisted.