Italy's new Prime Minister Mario Monti announced late on Sunday and ahead of a crucial EU summit on Thursday and Friday, that his cabinet has approved a €30bn package of austerity measures to help “reawaken” the Italian financial system.

Europe's third biggest economy is scheduled to present the plan to parliament today in a bid to help pull Italy back from the verge of insolvency and assist in saving the common currency from collapse.

The austerity plan includes budget cuts, a higher pension age and instruments to help fight tax evasion.