Italian MPs have narrowly backed Prime Minister Silvio Berlusconi’s 54 billion euro austerity plan.
They voted in favour by 316 to 302, a majority of 14.
The measures look set to be brought into force after being approved by the Senate on Tuesday. The centre-right government had turned the vote into a no-confidence motion.
The lower house now moves to a final vote – which is largely a formality – on the package later which turns the austerity measures into law.
The mix of tax hikes and spending cuts aimed at balancing the budget by 2013 was agreed under heavy pressure from the European Central Bank.
It has demanded tough action from Italy to cut its massive public debt, which stands at 1.9 trillion euros.
Italian MPs back Berlusconi austerity plan