Just one day before European leaders are schedule to approve a plan to help Greece meet its debt obligations, the Italian government failed to approve its own spending cuts as demanded by EU members. One key measure that failed to be implemented was raising the retirement age from 65 to 67 as legislators feared it could force an election where it is likely the government would be defeated.
Italy will be forced to issue over 600 billion euros in bonds over the next three years in order to refinance maturing debt. In exchange for buying this debt, other EU countries have insisted that Italy cut its spending to more manageable levels. Failure to secure this new funding could force Italy into default.
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