Italy is broke. That has obviously been hard for some to stomach. Take Welfare Minister Elsa Fornero, for example. While announcing pension cuts recently, she broke down and couldn't eve finish her statement:
Business Insider has more, including a slightly different translation from one of its commenters, which seems to be tongue-in-cheek but still sums up the problem:
A commenter translates part of her statement: "I'm sorry. The people who work have no more money to give you. As a result, the pension age will go to 62 years old for woman, and 65 years old for man. No longer can we afford to give you a raise every year for inflation of prices, so you will not get this."
This comes as Italy's new premier must try to persuade a skeptical Parliament that his new plan to cut spending and boost growth will return Italy's ailing economy to health as Europe enters a crucial week for future of the euro currency.
Premier Mario Monti, an economist, is to brief both Parliament chambers Monday on the package, which includes euro30 billion ($40.5 billion) in spending cuts and tax hikes and euro10 billion ($13.5 billion) spent to boost Italy's anemic growth.
His government agreed Sunday to slap taxes on primary residences and luxury goods like yachts, expensive cars and private airplanes, increase the age at which retirees can draw full pensions, trim the cost of Italy's political class and give incentives to companies that hire women and young workers.
The package, passed as an emergency decree, takes immediate effect but Parliament must still approve it within 60 days.
Unions blasted the pension reform as "socially unbearable," and politicians on all sides said the measures were severe and that they weren't yet convinced. But many appeared resigned to "holding our nose and voting," as Maurizio Sacconi, a labor minister under ex-Premier Silvio Berlusconi, put it.
"We still aren't convinced, especially with regard to women," said Pierlugi Bersani, head of the center-left Democratic Party, noting that if women take time off to raise children they will have to work well into old age to meet the seniority requirements to draw a pension.
Monti, a former EU commissioner, has been under extreme pressure to come up with speedy and credible measures that will persuade markets to stop betting against the common currency. Italian borrowing costs have spiked since October, which could spell disaster if Italy is unable to keep up on payments to service its enormous euro1.9 trillion ($2.6 trillion) debt, which is equivalent to 120 percent of its GDP.
Italy needs to refinance close to euro200 billion ($270 billion) of that debt by May.