The pigs: Ireland, Greece, Portugal, and Spain have been struggling for months to adopt the austerity measures demanded by their northern neighbors: Germany, the Netherlands, and Finland, some say France. But now Italy has joined the crew.
Berlusconi has announced that he will balance the Italian budget by 2013, earlier than expected, by slashing 45 billion euros in public spending. He also promises to raise taxes on people earning more than 90,000 euros/year. Investors didn’t like the previous Italian plan whereby all the cuts weren’t due to take effect until after the next election. They thought they’d be ignored by the new government. So the Prime Minister had to do more.
Whether this will convince investors that Italy can remain the third biggest economy in the Euro Zone remains to be seen. Otherwise, the currency might not continue because Italy, unlike the others, is too big to get a bailout.