The senate is to begin debate on the measures, which are a crash response to market pressures against Italian debt and to demands from the European Central Bank for structural reforms and spending cuts.

The main Italian stock index had closed with a drop of 4.38 percent on Monday when leading European stock markets fell heavily on renewed concern about eurozone debt, particularly in Greece and Italy, traders said.

Markets were also undermined by concerns about possible economic slowdown or even recession in large parts of the world economy.

The FTSE Mib index fell in initial trading to 14,164 points, and Italian shares were again hard hit. Shares in Unicredit fell by 3.25 percent to 0.805 euros and in Intesa Saopaolo by 2.24 percent to 1,006 euros.

Italian debt bonds also fell sharply on Monday to close showing an increased yield or interest rate of 5.547 percent on 10-year debt. At the close of trading on Friday the yield on 10-year debt was 5.265 percent.

Traders said that one factor for the rise of the yield was scepticism among investors about application of the new measures to correct public finances.

The senate was to begin discussion of the measures in the afternoon.

The main trade union, the CGIL, has called for protest demonstrations to be held acros the country.