Italy geared up for a cabinet meeting on Wednesday to launch "urgent" reforms ahead of the G20 summit as Prime Minister Silvio Berlusconi struggles to fight off contagion from the eurozone debt crisis.
The meeting starting at 1900 GMT will adopt "the most urgent measures" that Berlusconi promised to Italy's European partners at a summit in Brussels last week, Transport and Infrastructure Minister Altero Matteoli told reporters.
The minister did not give further details on the proposals, which would still have to go to parliament for final approval, saying: "We are still writing them and we will try and insert as many measures as possible."
Among the reform measures being discussed are a liberalisation of the professions such as lawyers and dentists to boost competition, a series of major privatisations and an increase in the pension age to 67.
The pension reform proposal has provoked a rift between Berlusconi and his key coalition partner, the Northern League, while a plan to reform labour laws to make firing workers easier has infuriated trade unions.
Berlusconi is keen to travel to the G20 summit with results in hand, after a bruising on the markets on Tuesday in which Italy suffered its worst stock session since the start of the global financial crisis in October 2008.
Italy's leading companies and eurozone leaders France and Germany have urged Berlusconi to move quickly on long-promised reforms to cut debt and boost growth but the government has been mired by recent infighting.
The Milan stock market recovered on Wednesday and was up 2.41 percent at around 1500 GMT after closing 6.8 percent lower on Tuesday.
But the borrowing rate on 10-year government bonds was still perilously high at 6.22 percent -- close to its record high of 6.397 percent.
The market turmoil has fanned investor fears that Italy could be the next country to be dragged into a debt spiral like Greece, Ireland and Portugal.
Italy is the eurozone's third largest economy and economists warn that rescuing it could prove impossible, unlike for the smaller economies that have already been forced to seek bailouts because of high borrowing rates.
Berlusconi's popularity ratings meanwhile have hit a record low of 22 percent, according to the latest poll released on Wednesday, and the centre-left opposition has called on the prime minister to resign.
"Berlusconi's time is over. The 'Cavaliere's' resistance no longer makes sense," the Corriere della Sera daily said in an editorial.
Pier Luigi Bersani, the leader of the main opposition Democratic Party, said Italy needs "credible people on the international stage" with broad support in parliament -- a reference to Berlusconi's meagre majority.
President Giorgio Napolitano's appeal on Tuesday on all political forces to act "with urgency" and "a new perspective" was interpreted by commentators on Wednesday as a response to calls for a national unity government.