Italian Prime Minister Silvio Berlusconi vowed to hold a cabinet meeting to adopt new budget-cutting reforms by next Thursday under pressure from the European Central Bank as stocks crashed 6.65 percent in Milan. \"We have agreed to call a cabinet meeting by the 18th of this month,\" Berlusconi was quoted as saying at a meeting with trade unions on Tuesday. \"We have to act quickly. We have taken on heavy commitments,\" he said. Italian news reports said the government meeting would adopt a package of decrees, a move that would speed up the approval process of the measures. But reports from participants at the meeting said that trade union leaders were united in rejecting proposals to overhaul the labour market and the pensions system, calling instead for a reduction in bureaucratic costs and privatisations. The ECB this week began massive purchases of Italian bonds to prop up borrowing rates following a panic sell-off last week but in return it has called on the government to implement long-delayed structural reforms. In a 12-month bond auction for 6.5 billion euros ($9.3 billion) on Wednesday the yield was sharply down at 2.959 percent compared to 3.67 percent for a similar operation last month -- a sign of increased investor confidence. The bond auction however failed to stop a collapse in stocks amid investor nerves over the eurozone debt crisis. Stocks closed 6.65 percent lower -- the worst performance since April 2009 at the height of the global financial crisis. The difference between Italian 10-year government bonds and benchmark German bonds -- a measure of investor risk -- also climbed above 290 basis points. Berlusconi on Friday said Italy would speed up planned austerity measures to bring the budget back into balance by 2013 instead of 2014 -- but some analysts have cast doubt on the government\'s ability to implement cuts and reforms. Investors are nervous that Italy could be dragged into a public debt spiral. \"The austerity measures envisaged by the Italian government to reduce the deficit are a positive element but we have to see concretely how it plans to act,\" Chiara Cremonesi, an analyst at UniCredit, told AFP. Stefano Folli, a columnist for business daily Il Sole 24 Ore, wrote: \"Used to floating over problems and promising reforms that never come, Berlusconi\'s centre-right government has suddenly hit a wall. \"Either it climbs that wall by implementing the drastic and in some ways dramatic measures indicated by the ECB or it loses all legitimacy,\" he said. Financial information website Firstonline.info referred to criticism that Italian economic policy was now \"under administration\" by the ECB. \"An Italy under administration needs to raise funds. And it needs to do so quickly... There is no choice: following the ECB\'s orders is the only way to shield the country from speculation,\" commentator Carlo Musilli said. Among the proposals on the table listed by Italian newspapers were an earlier than expected increase in the minimum pension age, accelerated cuts in social welfare payments, a new tax on second homes and a wealth tax on savings. There are also proposals to cut perks and salaries for politicians, which are among the highest in Europe, amid rising public anger over austerity measures. Lawmakers called back from summer recess are also to meet on Thursday to discuss a constitutional amendment to enforce balanced budgets. Italian media reported that a letter from the ECB to Berlusconi demanded that the government proceed with the privatisation of municipal services and overhaul labour laws to allow easier firing of employees on permanent contracts.