Italy's government, in an effort to balance its budget in two years, has approved sharp budget cuts demanded by the European Central Bank, despite strong opposition from regional leaders who say the measures will hurt the poor.

Participants at the cabinet Friday said the austerity measures will call for about $28 billion in cuts next year and $35 billion in 2013.

The package aims to balance Italy's budget by 2013, as the European Central Bank has required in return supporting Italy's bonds. Interest rates on those bonds soared last week, increasing investor fears that Italy could be forced to join Greece, Ireland and Portugal in needing to secure international assistance to deal with its debt problems.

Italy's finance minister said earlier this week the country's public debt, now at 120 percent of its gross domestic product, is “extraordinary” and shows that current laws governing the budget are not working.

Meanwhile, European stock indexes soared on Friday for the second straight day, with U.S. markets also advancing, but not by as much at the end of a volatile week at exchanges throughout the world.

Share prices at exchanges in Britain, France and Germany all closed up by more than 3 percent, regaining most of this week's losses. In the U.S., all three benchmark indexes are ahead, with the bellwether Dow Jones Industrial Average of 30 key stocks up nearly one and a half percent. Earlier, Asian indexes closed mixed, little changed from Thursday.

Some stock trading in Europe was marked by new restrictions, as France, Italy, Spain and Belgium each banned the short-selling of stocks to calm market turmoil sparked by fears about huge debts accumulated by European governments. Short-selling is an attempt to profit by betting that a stock's price will fall.

In the U.S., markets were boosted by a government report that U.S. consumer spending advanced in July by the biggest amount in four months. Even so, a second report showed that consumer confidence is waning, dropping this month to a 31-year low.

The Dow index ended up 4 percent Thursday, after plummeting almost five percent the day before, in a week of alternating days of huge losses followed by massive gains. The S & P 500 and the NASDAQ also closed higher Thursday.

Analysts say stocks received a boost Thursday from a U.S. government report that said first-time claims for jobless benefits fell to a four-month low in the past week. Many investors interpreted that as good news for the U.S. economy, following an unprecedented downgrade of the U.S. sovereign debt rating a week ago. That downgrade triggered Monday's sell-off, starting the week of market gyrations.