Mario Monti's government of unelected technocrats has an overwhelming majority in both houses of parliament and the vote, to be held in the Chamber of Deputies in the afternoon, should pass easily.

The austerity plan will then move to the Senate, where a similar vote is expected to be held before Christmas, marking the final passage of a decree law that went into effect on December 4 but needed parliamentary approval within 60 days.

Monti's government was appointed last month to face a collapse in market confidence that put Italy at the heart of the euro zone debt crisis. He has raced to push through the package of tax hikes, spending cuts and pension reform aimed at meeting Italy's goal of balancing its budget in 2013.

However, analysts say rising borrowing costs and the prospect of a fast-deepening recession still threaten to undermine Italy's fiscal consolidation efforts.

The government resorted to confidence votes to curtail debate on dozens of amendments to the law, many of them tabled by the opposition Northern League party.

Monti's predecessor, Silvio Berlusconi, had urged a confidence vote, saying his PDL party -- the biggest in parliament -- would support the government out of a sense of responsibility, not because it agrees with all the sacrifices being asked of Italians.

RECESSION

Both Berlusconi's PDL and the centre-left Democratic Party have misgivings about parts of the bill but cannot sabotage the government for fear of unleashing an economic catastrophe that probably would lead to Italy defaulting on its debt.

Underlining the depth of the crisis, the main employers' lobby Confindustria on Thursday slashed its growth forecast for Italy next year to minus 1.6 percent from a previous estimate of plus 0.2 percent and said the country was already in recession.

It said even this forecast was based on Italian bond yields dropping to below 5 percent by April compared to around 7 percent now -- the level at which Ireland, Greece and Portugal were forced to take bailouts.

Such a rescue for the much bigger Italian economy would probably overwhelm Europe's defenses, which is why the country is in the frontline of the euro zone crisis.

The Northern League heckled Monti in parliament this week and held up placards saying, "This is not a budget, but a hold-up." They also tried to obstruct the calling of the confidence vote by filibustering in the chamber before Speaker Gianfranco Fini cut them short.

• A Permanent Economic Emergency