Italy will adopt emergency budget cuts worth 20 billion euros next year and 25 billion euros in 2013, Prime Minister Silvio Berlusconi told local government representatives on Friday.
A source present at the meeting, held to outline the contents of an emergency decree to be adopted by the cabinet later on Friday, said ministry budgets would be cut by 6 billion euros next year and 2.5 billion in 2013.
The source did not say which ministries would be affected.
Economy Minister Giulio Tremonti told the meeting the decree would also reduce layers of local administration, eliminating some provincial governments and town councils and privatising local services.
The government aims to bring the budget into balance by 2013 to reassure panicked financial markets about the solidity of Italy's public finances.