Italy's government is racing to get its heavily contested 2014 budget bill through the upper house of its Parliament before the year is out while analysts and experts warn that the country still has a long way to go before its economy is on safer ground.
The budget, which is expected to be approved by the Senate, has been the subject of two months of political wrangling and widespread criticism from businesses, trade unions and opposition parties who say it fails to do enough to aid Italy's stagnant economy.
It includes measures to lower taxes for workers and Italian households and attempts to reduce the so-called "tax wedge" – the difference between employers' labor costs and a worker's take-home pay which the government has said it will fund with public spending cuts.
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The extensive wrangling has forced Italy's Prime Minister Enrico Letta to resort to using a confidence vote in order to accelerate the budget's passage.
Speaking at the end of a European Union (EU) summit in Brussels on Friday, Letta told reporters that he had to steer a difficult path between encouraging growth and keeping public finances in check.
"I have to keep the ship afloat, I want there to be instruments for growth without wrecking public finances," Letta said. "Nobody has a magic wand, we can't print money."
Italy is under heavy scrutiny from European authorities to get its public finances in order and it has already warned Italy that its 2014 budget would not cut its public debt fast enough – a moot point for a government trying to keep itself together let alone the country's accounts.
(Read more: Italy's latest risk to stability: the 'Renzi Factor')
Not only has a year of high-profile political instability threatened to derail the government, a hotch potch of center-left and center-right politicians and parties, but it has left economic reforms largely disputed, defeated or untouched.
In the meantime, its public deficit has hovered perilously near the 3 percent limit set by the European Commission and its economy has staggered through a recession that has lasted over two years. Its debt to GDP level is the second-highest in the euro zone too, at 133 percent.
European Central Bank Executive Board member Peter Praet was the latest high-profile European policy-maker to warn Italy to keep its public accounts in check and stay on its planned path to lower debt, this weekend.
(Read more: Italian companies implode amid government turmoil)
"To stay on a sustainable path, it's essential that the government maintain its commitments," Praet told Italy's La Stampa newspaper on Sunday. "You cannot afford any slippage on the public accounts."
For his part, Letta is all too aware that the country has severely tested the patience of European officials and has little room for maneuver economically.
(Read more: 'Rome burns' as PM Letta wins confidence vote)
Referring to opposition to the 2014 budget, Letta said that "everyone makes requests (of the budget) but the sum of all of them would lead to the bankruptcy of the Italian State."
"We absolutely have to maintain the same care that the father of a family does. I say that to everyone in Italy who wants Father Christmas [handling the budget] instead," he said.
"We have to make balanced choices that keep us credible in Europe."
- By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt
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