Italian central bank chief calls for extra spending cuts

AFP, Wednesday 13 Jul 2011

Italy's central bank governor warns that if spending is not reduced, taxes will have to be raised

Italian central bank governor Mario Draghi on Tuesday called for additional cuts in public spending to avoid tax increases, amid growing concern about Italy's position on eurozone financial markets.

"If more spending is not reduced... it means tax will have to be increased," Draghi said in a speech in which he emphasised that budget austerity measures had to be outlined "very rapidly."

The Italian parliament is scrambling to adopt austerity measures this week following heavy pressure on stock and bond markets in recent days.

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