'Our hearts are bleeding': Berlusconi, announcing €45bn in cuts

Italy has agreed more than €45bn of cuts over the next two years in an attempt to balance its budget by 2013.

The emergency measures are in an effort to meet demands made by the European Central Bank, which agreed to buy up Italian bonds earlier in the week.

The fresh wave of austerity measures includes tax increases for those earning €150,000 and over, while 50,000 jobs are to be cut at local government level.

Announcing the cuts, Italian Prime Minister Silvio Berlusconi said: "Our hearts are bleeding. We're facing one of the greatest challenges on the planet…The whole system of relationships between states is changing."