From Reuters we learn that the Italian government will approve on Friday a sweeping package of cuts and tax increases on Friday as it scrambles to meet European Central Bank demands for action to shore up confidence in its public finances.  After days of criticism for a lack of clarity over how it intended to meet an ECB-imposed target of balancing the budget by 2013, Prime Minister Silvio Berlusconi's government is set to deliver a harsh dose of austerity to Italy's fragile economy. Berlusconi told local government representatives that the cabinet would adopt austerity measures worth €20 billion (£17.4 billion) in 2012 and a further €25 billion the following year through a mixture of public spending cuts and higher taxes.   Funding to regions and local governments would be cut by €6 billion in 2012 and €3.5 billion in 2013, while budgets for government ministries in Rome will be cut by €6 billion in 2012 and €2.5 billion in 2013, officials at the meeting said. The government would glean the remaining €8 billion in measures for 2012 from higher VAT, a "solidarity tax" on high earners and raising the pension age, Roberto Formigoni, governor of the Lombardy region, told reporters after the meeting. To continue reading, go to:   [Reuters, 8/12/11, "Italy Set to deliver .."]