Italy PM Mario Monti briefs politicians on austerity plan

Premier Mario Monti briefed political leaders on Saturday on his package of austerity and economic growth measures ahead of a critical week of Italian and European decision-making to confront the continent's debt crisis.

Politicians gave few details about the individual measures Monti outlined, but described them as "severe" but necessary, since Italy had put off tough economic reforms for too long.

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"Let's be clear: Doctors rarely prescribe medicine that tastes good," said Pierferdinando Casini, head of a small but influential Christian Democrat party. "Medicine is always bitter, but sometimes it's necessary to prevent the patient from dying."

Monti is under enormous pressure to reassure markets that he can push the package of reforms through Parliament to heal Italy's broken public finances: Italy's euro 1.9 trillion ($2.5 trillion) in debt is 120 per cent of its gross domestic product.

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Unlike Greece, Portugal and Ireland, which got bailouts after their borrowing rates skyrocketed, the eurozone's third-largest economy is considered to be too big to be bailed out. An Italian default would be disastrous for the 17-member eurozone and reverberate throughout the global economy.

Monti was installed on November 26 after markets lost confidence that then-Premier Silvio Berlusconi - battered by sex scandals, legal problems and defections from his party - had the political wherewithal to push through the reforms needed to rein in the debt.

Monti hasn't disclosed details of his rescue plan, but he has said it includes both austerity cuts and measures to boost growth in Italy's anemic economy. He has promised it would be socially equitable, and that it would go after those who hadn't paid their share of taxes before.

Politicians, union and business leaders have said the package likely includes reinstating an unpopular home property tax abolished by Berlusconi, raising the sales tax and the income tax at the highest brackets by a few percentage points, and requiring Italians to work two or three years more than the 40 years now needed for eligibility to draw a pension.

The minimum retirement age of women in the private sector is expected to be raised from 60 to 62 or 63 starting next year, building on a Berlusconi government strategy.

Officials of Italy's powerful unions and some center-left parties have voiced concern over pension reforms. Berlusconi's party has opposed restoring the property tax and a rumored wealth tax.

Monti met with Angelino Alfano, secretary of Berlusconi's party, as well as Casini and other members of centrist parties on Saturday.

The consultations come ahead of a critical Cabinet meeting on Monday during which the measures are to be approved. Monday afternoon he introduces them to Parliament, where the Senate has pledged to vote on them by Christmas.

At the same time, Monti is gearing up for the critical summit meeting this week of eurozone leaders aimed at saving the euro.