Wednesday 17 January 2018

Italian minister in tears as she announces austerity measures

Italian Welfare Minister Elsa Fornero starts crying as she speaks during a news conference

AS ENDA Kenny delivered his prepared state of the nation address here, the Italian Welfare Minister Elsa Fornero broke down in tears as she announced an end to inflation indexing, a move that will mean an income cut for many pensioners.

Under the austerity plan unveiled yesterday, Italy will raise the minimum pension age for women and men to 66 by 2018, and will scrap annual inflation adjustments for many pensions.

"We had to... and it cost us a lot psychologically... ask for a..." Fornero said, but was unable to complete the sentence with the word "sacrifice" as she wiped tears from her eyes.

The measures come before 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 and Friday in Brussels to try to agree a broader rescue plan for the bloc.

Italy, with a public debt of around 120 percent 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 percent, similar to levels seen when Ireland was 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.

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