Grilli, who took over the economy portfolio from Prime Minister Mario Monti on Wednesday, made his comments in a long interview with the Corriere della Sera newspaper.

The Bank of Italy governor has forecast that the economy will shrink by 2.0 percent and employers' lobby Confindustria has forecast a contraction of more than 2.4 percent.

Grilli also said in the interview that he would like to see a multi-year plan to privatize state assets, bringing in 15-20 billion euros a year.

He lamented that markets "don't yet recognize" Italy's efforts to put its accounts in order and said that a balanced budget is "at hand".

More than 10 billion euros of revenues are expected this year as a result of government measures to combat tax evasion, he said.

(Reporting By Philip Pullella)

• A Permanent Economic Emergency