The Italian government has approved plans to save up to 26 billion euro (£20.8 billion) over the next three years.
Premier Mario Monti's cabinet approved a decree law that includes a temporary hiring ban on civil servants and a gradual reduction of high-level bureaucrats, cutbacks in hospitals and judicial offices and a 50% reduction in the use of official cars.
The government said in a statement that the plan will avoid any increase in sales taxes until at least next June.
Mr Monti, an economist appointed last November to head a technocrat government to tackle the financial crisis, has been criticised for raising taxes as many Italians are already hard pressed.
Mr Monti said the operation "aims to reduce excess spending.without affecting the quality of the services".