Italy government approves public spending cuts

Italian Prime Minister Mario Monti emerged early Friday from a late night marathon cabinet meeting to announce that his government has approved public spending cuts worth 26 billion euros (32 billion dollars) by 2014. "This is an operation which aims to reduce excess spending ...without affecting the quality of the services," Monti told a news conference in Rome. The cuts will allow the government to avoid having to increase value added tax "at least until the end of June 2013," a government statement said. "Being able to avoid the VAT increase will have a (positive) effect on the economy," Economy Vice Minister Vittorio Grilli said. The government said the latest cuts, the result of a spending revue, will allow it to save some 4.5 billion euros for the remainder of 2012, 10.5 billion in 2013 and 11 billion in 2014.