Italy’s upper house of parliament is set to approve drastic budget cuts on Thursday aimed at calming market fears about the sustainability of the country’s public debt.

The four-year austerity plan, worth at least $57 billion, is expected to be passed by the Italian Senate on Thursday and by the lower house on Friday.

The austerity measures are intended to cut Italy’s debt, which is equivalent to 120 percent of the nation’s output. Easing the debt burden makes it more likely that the loans will be repaid, so lenders will offer lower interest rates, cutting borrowing costs.

The International Monetary fund called Tuesday for “decisive implementation” by Italy to cut its public debt after investors continued to dump Italian bonds.

Global stock prices had fallen sharply earlier this week in part because investors grew more worried that the European debt crisis might hit Italy next. Investors apparently were shaken by political bickering in Italy’s government over a proposed austerity budget that would cut its debt.

Italy’s opposition parties, largely opposed to austerity measures, are calling for elections to be held after they are approved. Many have also called for the resignation of Prime Minister Silvio Berlusconi, saying he is too politically weak to guide the nation through its debt crisis.

So far, Ireland, Portugal and Greece have received emergency loans from other European Union nations. Top IMF officials continue to work on a second economic bailout for Greece.

Bailing out Italy would be more difficult because it has Europe’s third-largest economy and is far bigger than the countries that have received aid so far.