The lion’s share of the budget cuts will come from an unpopular €10bn (£8.56bn) property tax. Tariffs on private jets, yachts and sports cars will also increase, while VAT will go up two per cent “if necessary”.
The country will also switch over to defined contribution rather than final salary pension schemes for public sector workers. And those with pensions at the top end of the spectrum will their pay-out’s link to inflation abolished.
There will also be a €1,000 cap on cash transactions to try and stamp out tax evasion.
Yield on Italy’s ten-year debt fell steeply from 6.6 per cent to under six per cent following the news.