Italy is the latest European country to approve austerity measures.
The lower house of parliament has voted through 25 billion euros worth of cuts to reduce the country’s deficit. The Senate had already voted in favour.
The public sector is targeted the most, with salaries and administration costs coming under close scrutiny.
But the opposition and unions are up in arms.
Dr Stefano Mele from the CGIL union said: “The planned impact is that over the next four years 40,000 doctors could be laid off without being replaced and 50 percent of doctors who work with temporary contracts will not have them renewed. This means that important services will be jeopardised.”
The government wants to get its budget deficit down from 5.3 percent of GDP to 2.7 percent by 2012. The EU limit is three percent.
The government has also won approval to gradually raise the retirement age from 2015. Over the next 40 years it is hoping the measures will save the country 90 billion euros.