ITALY looks set to unveil the bare bones of a 1998 budget this week seeking 25 trillion lira (£9.21 billion) of deficit cutting measures - enough on paper to meet a key European monetary union criterion, analysts say.

The treasury undersecretary Mr Giorgio Macciotta said last week Italy needs a deficitcutting budget of around 25 trillion lira for 1998 to meet conditions for EMU membership.

Analysts expect budget targets to be contained in the government's annual document of three year rolling economic targets.

Italian newspapers, which analysts say often have accurate economic data before official figures are released, gave a more detailed breakdown at the weekend, predicting 17 trillion lire of spending cuts and eight trillion of higher revenues to pare the budget deficit in 1998. Mr Andrea Cecchini economist at Banque Indosuez in Milan, said figures quoted in newspapers were sufficient to meet a key Maastricht criterion.