Italy’s Cabinet has approved legislation for a constitutional amendment that would require governments to balance their budgets beginning in 2014.

Under the legislation adopted by the Cabinet Thursday, the Italian government would only be able to go into debt under exceptional circumstances such as a severe economic downturn.

The proposal is part of a series of measures aimed at calming investors’ fears about Italian government finances and preventing Italy from becoming the next eurozone economy to need a European Union bailout.

The Italian upper house of parliament, or Senate, voted Wednesday to approve a revised package of spending cuts and tax increases designed to save the country $75 billion and balance the budget by 2013. The lower house is due to vote on the austerity bill in the coming days.

Italian Prime Minister Silvio Berlusconi’s proposal for a balanced budget amendment to the constitution must be approved by a two-thirds majority in each house of parliament. It is not clear when lawmakers will begin debate on the measure.

Italian Economy Minister Giulio Tremonti said Thursday a balanced budget should be not only an accounting criterion but also “a civil and political principle of the highest order.”

Italy has seen its borrowing costs soar in recent weeks in response to financial market concerns about the sustainability of the center-right government’s huge public debts.