The Italian senate on Thursday approved a 24.9-billion-euro (31.6-billion-dollar) austerity package aimed at bringing Italy's budget within the eurozone fiscal limit, local media reported.

The austerity package was approved in a Senate confidence vote by 170 to 136, according to the ANSA news agency.

The package sets out to trim Italy's budget deficit, which was 5.3 percent of gross domestic product in 2009, back to 5 percent in 2010, 3.9 percent in 2011 and 2.7 percent in 2012.

The two-year plan of spending cuts will start its way through parliament's lower house on July 26. It is expected to gain final approval before the August recess.

According to ANSA, Economy Minister Giulio Tremonti, the architect of the package, has called it "a necessity" and shortly before the vote, Bank of Italy Governor Mario Draghi hailed the pace at which the government was pushing the package through parliament.

"Moving fast was inevitable," Draghi said, referring to possible speculation in the wake of the Greece debt crisis. "A sharp correction in course was needed."

"Sorting out public accounts and growth are the essential conditions for financial stability," the governor said, adding it would be possible to cut taxes when the fight against tax dodging started to yield fruit.

"The containment of tax evasion can be an important lever for growth if it is tied to a reduction of taxes on honest taxpayers," Draghi said.

The package sets a norm that will raise the retirement age for women in the public sector from 60 to 65 next year. Other measures include a 10 percent cut to ministerial budgets and perks such as limousines.

According to the package, ministers and undersecretaries who are not members of parliament will also take a 10-percent pay cut.

There will be a two-year public sector pay freeze while public-sector managers will have their annual salaries trimmed by 5 percent above 50,000 euros and by 10 percent above 150,000 euros.

Under the bill, the price of off-patent prescription drugs will move into line with the European Union (EU) average by 2011. The package also contains new laws against tax evasion and unregistered homes.

On Tuesday, the package secured the approval of EU financial and economic ministers. At a meeting in Brussels, they agreed the Italian budget "met the recommendations" recently issued by the European Commission.

Meanwhile, regional governors reiterated their opposition with the head of their association, Vasco Errani, vowing to fight against the unbalanced cuts and to not stop working to change the package.

The opposition Democratic Party also opposes the package and is set to stage nationwide demonstrations on Friday and Saturday.

The austerity plans have already triggered protests by the country's public-sector workers, diplomats, short-term workers, students, magistrates and pensioners.