Italy’s government has vowed that its new austerity package will slash the country’s huge bureaucratic costs, with thousands of jobs and local elected posts being gradually eliminated.

Even premier Silvio Berlusconi has called the cuts “excessive”, but said they were approved because of widespread discontent among citizens over the perks enjoyed by Italy’s political elite.

The government approved the €45.5 billion in emergency measures over two years to balance the budget by 2013 in response to demands by the European Central Bank.

The package – a mix of spending cuts and tax increases, including a “solidarity tax” for high-earners – aims to calm market turmoil and make sure Italy is not the next victim of Europe’s debt crisis.

Cabinet minister Roberto Calderoli said yesterday the number of national representatives, currently almost 1,000, would be halved – though this requires a lengthy constitutional process.

He said provincial administrations for towns with less than 300,000 people or smaller than 1,160sq miles will be abolished. Provincial administrations – in-between municipalities and regions – are seen by many as redundant and expensive.

While the exact number will be determined by a fall census, the measure is expected to affect between 29 and 35 provincial governments, Calderoli said. Newspaper La Repubblica said these include Siena, Trieste and Prato.

Towns with fewer than 1,000 residents will merge with larger communities, a change that affects about 1,970 municipalities out of 8,094 nationwide, according to the government.