European Council president Herman Van Rompuy has convened a summit to deal with 'the financial stability of the Euro area as a whole' and the future financing of Greece.
In a statement on his website Van Rompuy said that he had convened a meeting of euro zone Heads of State or government for next Thursday at 11am Irish time.
'Our agenda will be the financial stability of the Euro area as a whole and the future financing of the Greek programme,' Van Rompuy said.
'I have asked for the preparatory work to be brought forward inter alia by the Finance Ministries.'
Meanwhile, Italy's lower house of parliament has approved a €48-billion austerity package in a vote rushed through to try to calm a financial market storm which has sent Italian borrowing costs soaring in recent days.
The lower house voted 314 in favour and 280 against the motion, which hours ealier had passed in a confidence vote.
Separately, the Italian Treasury said it was fully committed to safeguarding financial stability and strengthening the resilience of the country's banking sector.
The Treasury issued a statement after the Bank of Italy announced that the country's five large banking groups passed stress tests by a wide margin.
Financial markets have been highly volatile in recent days as a credibility crisis over heavily-indebted European countries' ability to repay loans has threatened to spread to Italy - the euro zone's third-biggest economy.
'Very high public debt remains the most vulnerable point of the Italian economy particularly in this climate of high uncertainty,' the EU's Economic Affairs Commissioner Olli Rehn told La Repubblica daily in an interview.
The Italian parliament has raced to adopt its austerity measures in record time after a draft was put forward by the government just two weeks ago.
In a report out today, the central bank warned that if bond rates remain at their current elevated level this could have 'considerable costs for public accounts and a risk of repercussions on the financing costs of the economy.'
'The macroeconomic scenario is subject to heightened uncertainty,' it said.
The report added that recent tensions in the euro zone had 'increased the urgency of proceeding with a consolidation of public finances' in order to 'lower risk premiums and diminish long-term borrowing rates.'
It added however: 'In the immediate future, the costs of increased yields on bonds for our country are limited.'
The central bank also raised its forecast for gross domestic product growth this year to 1.0% from 0.9% but kept its prediction for 2012 at 1.1%.
The Italian economy grew by 1.3% last year.
Italy is the world's eighth-biggest economy but is laden down by a public debt of about 120% of annual output, even though its budget deficit has remained relatively moderate compared to deficits elsewhere in Europe.
The austerity budget - which will cut family tax benefits, reduce top-tier pensions, slash regional subsidies and launch privatisations - aims to reduce the deficit to 0.2% of output by 2014 from 4.6% last year.
Analysts have warned that Italy's virtually stagnant economy and tensions within Prime Minister Silvio Berlusconi's ruling coalition are potential risks but have dismissed the prospect of Italy having to resort to a bail-out.
The uncertainty has hurt Italian stocks in recent days and long-term borrowing rates - a measure of risk - flew to record highs yesterday.
Greek creditors talks go into second day
Meanwhile, talks among Greece's private creditors have run into a second day in Rome today as the European Union struggles to agree on the role of banks and insurers in any second debt rescue for Greece.
'The meeting continued late last night and resumed this morning,' an Italian Treasury source told AFP.
'Intense negotiations are underway on what measures to take on Greece and how to avoid contagion,' Rehn told La Repubblica.
This is the third time these sensitive closed-door talks are taking place in the Italian capital in less than a month.
The extension of the meeting is a sign of the growing importance of the negotiations, which bring together officials from the Greek government and the European Central Bank as well as leading banks and insurance companies.
The meeting was hosted by Vittorio Grilli, head of the European Economic and Financial Committee and director general of the Italian Treasury.
The Treasury source said no press conference was expected after the talks, which comes after two similar meetings in Rome on 27 June and 7 July.
Negotiations are underway in Brussels over a possible crisis summit of euro zone leaders in the coming days to discuss the Greek bail-out.
