The issuance of eurobonds, something the EU is considering, would have prevented the current debt crisis enveloping the eurozone, Italy's Finance Minister Giulio Tremonti said on Saturday.
Tremonti told a news conference in Rome that there is now "a fundamental need for greater consolidation of public finances in Europe."
Italy's cabinet approved a 45.5-billion-euro ($64.8-billion) austerity budget on Friday that Prime Minister Silvio Berlusconi said was due to pressure from Finland, Germany and the Netherlands.
The draft measures -- which must still go before parliament for final approval expected early September -- include a new tax on high earners and deep cuts to local government and cabinet costs.
They seek to assuage jittery markets by returning Italy to a balanced budget in 2013 instead of 2014 as previously planned, and come on top of a 48-billion-euro package agreed in July when Rome first came under pressure.
"If we had had eurobonds, we would not be where we are today," Tremonti said, giving details of the austerity plans.
The European Commission will publish a report later this year on the possibility of issuing eurobonds guaranteed by eurozone states.
The idea of eurobonds issued and guaranteed by countries with better credit ratings than debt-laden Greece has long been floated as a way of helping Athens and other struggling eurozone members.
But the suggestion has proved controversial, with Germany, Europe's biggest economy, opposed to the scheme since many there see it simply as Berlin handing over taxpayers' money to EU states which have not followed the rules on keeping their finances strong.
Tremonti voiced conviction that the eurobond model proposed by Luxembourg Prime Minister Jean-Claude Juncker, who heads the Eurogroup of finance ministers, is the way forward.
"We await developments. If not the difficulties will continue," he warned.
The draft measures containing Italy's new austerity programme will be published in the official gazette on Sunday, after which parliament has 60 days to ratify them.