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Italy’s government has presented details of its contentious labor market reform, saying it contains costs for companies as well as introducing flexibility for hiring and firing employees and new opportunities for young workers.

Premier Mario Monti and Labor Minister Elsa Fornero outlined the proposed legislation Wednesday after winning backing from three major parties. Monti said he expected that, in light of such support, Parliament would approve the reform package “as quickly as possible.”

Fornero acknowledged the difficulty Italians may have in accepting the changes, particularly the contentious issue of making it easier to fire workers. But she said: “The world has changed, and we have to try to adapt to a changed world.”

She said planned to travel across Italy to explain the changes to Italians and unions.

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U.S. Treasury Secretary Tim Geithner told a U.S. Senate panel that he believes Fannie Mae and Freddie Mac should reduce principal on some home mortgages.

“We’ve been encouraging Fannie and Freddie to take another look at the map, at the economics of the finance, because we think there is a strong case in some circumstances to add principal reduction as part of their strategies to help maximize return of the taxpayer,” Geithner testified Wednesday to a subcommittee of the Senate Appropriations Committee.

At the end of last year 12.1 percent of mortgages were delinquent or in foreclosure, compared with 12.4 percent a year earlier, according to the U.S. Office of the Comptroller of the Currency.

Fannie Mae and Freddie Mac, the mortgage finance companies under government conservatorship since 2008, haven’t granted principal reductions because it would cost the taxpayer-funded companies almost $100 billion, Edward DeMarco, the acting director of the Federal Housing Finance Agency, said in a Jan. 20 letter to Congress. The agency oversees Fannie Mae and Freddie Mac.

“What Mr. DeMarco has said is that they are taking another look at their numbers, looking at our economic case fast cash. We are in the process of working through that with him and I hope he is going to be in a position to indicate what he plans to do in the next several weeks,” Geithner said.

“This is an important part of a credible national strategy that they have been reluctant to move even though they have done a lot of things that are very very helpful.”

The FHFA will release a study next month about whether it makes sense to allow forgiveness on underwater loans guaranteed by Fannie Mae and Freddie Mac, according to DeMarco.

“We are offering a rich array of tools to help borrowers with their mortgage payments,” DeMarco said today on Bloomberg Television’s “Street Smart” program with Trish Regan.

Three out of four borrowers with GSE loans who owe more than their homes are worth are current on their mortgages, DeMarco said.

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The Real Estate Council of Ontario is feeling the heat from Toronto

The Federal Reserve has the tools to keep inflation under wraps despite the huge increase in its balance sheet in recent years, a top Fed official said on Tuesday.

“The Fed can rein in inflation by raising interest rates at the appropriate time,” Minneapolis Fed President Narayana Kocherlakota said in answer to an audience question after a speech at Washington University in St. Louis.

Rather than simply raising its target policy rate, he said, the Fed will do so by raising the interest it pays on excess reserves held by banks same day payday loans.

Kocherlakota also said he sees the unemployment rate, now at 8.3 percent, falling slightly below 8 percent this year and to the “low sevens” by the end of next year.

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Bo Xilai, whose policies lured billions of dollars in foreign investment and thousands of jobs to China

Cambridge police on Friday arrested two people ahead of a speech by Dominique Strauss-Kahn, the former International Monetary Fund chief whose career collapsed after he was charged with sexual assault.

Cambridgeshire Constabulary spokeswoman Sarah Redman said a man and a woman, both in their early 20s, were arrested on suspicion of vandalizing the university’s debating society building with messages critical of the 62-year-old French politician.

The Cambridge News website displayed photos showing the walls of The Cambridge Union Society defaced with messages including “DSK GO AWAY” and “WOMEN DESERVE BETTER.”

Strauss-Kahn was scheduled to speak at the society later Friday despite protesters’ calls for the event to be canceled.

Strauss-Kahn resigned as head of the IMF after allegations last May that he sexually assaulted New York hotel maid Nafissatou Diallo. Prosecutors later dropped criminal charges against Strauss-Kahn, but Diallo has brought a civil case against him.

Her lawyer, Douglas Wigdor, was scheduled to speak on Diallo’s behalf at a rival event Friday.

A statement posted Friday on the debating union’s website states that the invitation was made before Strauss-Kahn’s controversial departure from the IMF.

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Victoria’s Secret parent Limited Brands Inc (LTD.N: Quote, Profile, Research, Stock Buzz) reported a large sales gain for February, leading a charge of retailers that benefited from rising consumer confidence to beat Wall Street forecasts.

Limited, which also owns Bath & Body Works, said on Thursday that sales at stores open at least a year rose 8 percent last month, above the analysts’ average forecast of 6.2 percent compiled by Thomson Reuters.

So far six retailers, including Stage Stores (SSI.N: Quote, Profile, Research, Stock Buzz), and teen-oriented The Buckle Inc (BKE.N: Quote, Profile, Research, Stock Buzz) and Zumiez Inc (ZUMZ.O: Quote, Profile, Research, Stock Buzz) have reported February sales that have come in above Wall Street forecasts.

Improving consumer confidence is one reason analysts expect February same-store sales to be up 3.4 percent for the 21 companies tracked in Thomson Reuters’ same-store sales index.

Other chains, including Macy’s Inc (M.N: Quote, Profile, Research, Stock Buzz), Kohl’s Corp (KSS.N: Quote, Profile, Research, Stock Buzz) and Target Corp (TGT.N: Quote, Profile, Research, Stock Buzz), will report later on Thursday morning.

The housing market appears to be stabilizing, and the unemployment rate fell to 8.3 percent in January from 9.1 percent in August. The University of Michigan’s consumer confidence survey rose for the sixth straight month in February payday lenders.

And the surging stock market, which this week hit its highest levels since May 2008 financial meltdown, has been a boon for upscale chains like Saks Inc (SKS.N: Quote, Profile, Research, Stock Buzz) and Nordstrom Inc (JWN.N: Quote, Profile, Research, Stock Buzz) in recent months.

But the rising price of gasoline is casting a pall on consumer spending. As of Thursday, a gallon of gas in the United States cost $3.74, up 35 cents from a year earlier, according to the American Automobile Association.

On Wednesday, Costco Wholesale Corp (COST.O: Quote, Profile, Research, Stock Buzz) said its same-store sales had risen 8 percent in February, outpacing the 7.6 percent rise that analysts expected, according to Thomson Reuters data. Much of the warehouse club chain’s gains in the past year have come from shoppers seeking cheaper gasoline.

Wet Seal (WTSLA.O: Quote, Profile, Research, Stock Buzz) was one of the few chains to report a decline in sales, but the fall of 5.8 percent was less steep than expected.

Home decoration and furniture chain Pier 1 Imports Inc (PIR.N: Quote, Profile, Research, Stock Buzz) said its same-store sales for the full holiday quarter rose 10.3 percent.

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Private nonresidential construction may pick up this year, as demand grows for new U.S. projects.

The Architecture Billings Index held at 52 last month, a sign of expansion, according to the American Institute of Architects. The commercial and industrial component — a proxy for private building activity — climbed to 54.1 in December, the highest in 10 months, the Washington-based association said Jan. 18.

The monthly survey of U.S.-based architecture firms is a leading indicator of nonresidential construction, said Kermit Baker, chief economist for the association.

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