Italy's new prime minister said his government has approved a package of emergency budget measure worth about $26 billion that will help pull Italy back from the brink of bankruptcy.

Mario Monti said Sunday the measures include immediate budget cuts as well as significant steps to fight tax evasion. To do his part to cut the spending, Mr. Monti said he will forego his salary as prime minister.

The measures will be presented to the parliament, which must approve them.

Mr. Monti spent the weekend briefing political parties, unions, business groups, consumer lobbies and others.

Greece, Ireland and Portugal have already been forced to secure international bailouts over the last year and a half. The chief fear now for European leaders is that Italy, with the continent's third biggest economy, may also need a bailout to avoid defaulting on its debts – a crisis that would threaten the continent's monetary union and could lead to a renewed worldwide recession.

German Chancellor Angela Merkel and French President Nicolas Sarkozy are to meet in Paris on Monday to announce a joint German-French plan to resolve the crisis, ahead of an European Union summit next Friday in Brussels.

All 27 EU nations would have to approve changes to the 1992 Maastricht Treaty that created the EU, but that broad approval may not be necessary if spending controls apply only to the 17 nations that use the euro as their currency.