Prime Minister Mario Monti has speeded up plans to approve a number of austerity measures to bolster Italy’s economy and head off the crisis threatening to engulf the eurozone.
At a cabinet meeting, called 24 hours ahead of schedule, he was expected to unveil new austerity measures.
They are thought to include savings, tax increases and pension reform set to force more Italians to work longer.
They come at a time of grave concern about the state of Italy’s finances.
Italy has recently been compelled to pay the kind of very high rates of interest that eventually forced Greece to call for an international bailout.
Mr Monti wants to show the outside world he is determined to put this country back on a sound financial footing, and he clearly hopes this will ease the intense pressure on Italy in the money markets, says the BBC’s Alan Johnston in Rome.
On Monday, German Chancellor Angela is due to meet French President Nicolas Sarkozy in Paris to outline joint proposals on closer ties between eurozone economies which they announced last week.
Eurozone leaders have warned the bloc is entering a decisive phase in its bid to resolve the debt crisis. They are due to meet on Thursday and Friday in Brussels to try to agree a broader rescue plan for the bloc.
Mr Monti, a former EU commissioner, said there would be no room for error at the summit and that financial markets would punish inaction.
“The choice is between adopting tough austerity measures and starting the euro rescue, or Italy not being able to stand on its feet, and we risk the collapse of the euro,” said Emma Marcegaglia, head of Italian employers’ lobby Confindustria.
