Italy's cabinet has approved an austerity budget to cut the deficit by some €24bn in 2011 and 2012.
The country is aiming to lower the deficit to 2.7% of gross domestic product in 2012, from 5.3% last year.
The cuts will target public workers and local government and could hit the popularity of Prime Minister Silvio Berlusconi.
Mr Berlusconi and Economy Minister Giulio Tremonti will present a definitive version of the plan tomorrow.
As well as cutting hiring and freezing salaries in the state sector, it delays retirement and cuts funds to local government.
Rome joins Greece, Spain and Portugal in enacting programmes to slash budget deficits with the aim of restoring investors' confidence following approval of a $1 trillion EU safety net aimed at stopping contagion from Greece's debt crisis.
