The Italian parliament has given final approval to sharp budget cuts aimed at calming fears that Europe’s third largest economy could be consumed by the continent’s debt crisis.

The parliament’s lower house, the Chamber of Deputies, voted 316 to 284 on Friday in favor of a four-year austerity plan worth at least $68 billion. The upper house, the Senate, approved the plan on Thursday.

The package is designed to balance the country’s budget by 2014. It calls for a variety of revenue-raising measures, including higher hospital fees, as well as cuts in spending by central and local governments and a freeze on public sector salaries.

Three European countries — Greece, Ireland and Portugal — have already been forced to secure international bailouts from their European neighbors and the International Monetary Fund, and Greece is already working on a second bailout. With a much bigger economy than those three countries, Italy is seeking to prevent its own financial meltdown.

Italy has already been forced to pay higher interest rates on bonds to finance its governmental operations.

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.

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

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

Mr. Berlusconi is in the midst of a trial in which he is accused of paying for sex with an underage teenage girl and then trying to cover it up. Last weekend, a Milan appellate court ordered his investment company to pay $801 million to a rival business venture after it bribed as judge to win approval of the takeover of a publishing company.