Italy approved budget cuts worth €24 billion over the next two years as part of a European effort to bring down deficits to defend the euro.
The measures were passed at a meeting of Prime Minister Silvio Berlusconi's Cabinet in Rome, a spokesman for Mr Berlusconi said.
A press conference to explain the measures was cancelled.
The premier and finance minister Giulio Tremonti will give a briefing on the measures tomorrow afternoon in Rome.
Italy, Europe's most-indebted nation, aims to bring its budget deficit below the European Union threshold of 3 per cent of gross domestic product in 2012 from 5.3 per cent last year.
France, Spain and Portugal are among the euro-region countries that have already announced supplemental spending cuts to try to assure investors they can tame public finances enough to shore up the euro, which has slid 14 per cent this year.
A draft of the plan called for a three-year wage freeze for civil servants and limited hiring in the next two years to help save €5 billion, UIL union leader Luigi Angeletti said after being briefed by Mr Tremonti on the plan.
The government is seeking €12 billion a year in savings, with about half coming from cutting outlays to regional and city administrations, Turin Mayor Sergio Chiamparino said after meeting Mr Tremonti.
Italy's €1.76 trillion debt, the world's fourth biggest in nominal terms, trails only that of the US, Japan and Germany, and reached 115.8 per cent of GDP last year, the highest ratio in the EU.
Italy's budget gap last year was less than half that of Greece, Ireland and Spain.
The government will reduce the deficit below the EU limit a year before Spain and Portugal, and two years before Greece. The total two-year adjustment is 1.6 percentage points of GDP.
The government cut its forecasts for economic growth this year and next on May 6th, saying the economy will expand 1 per cent in 2010 and 1.5 per cent in 2011, down respectively from 1.1 per cent and 2 per cent predicted in January.
Italy said on the same day it will cut the deficit to 2.7 per cent of GDP by 2012.
Bloomberg