ROME (AFP) - Italy's cabinet on Saturday approved emergency measures aimed at boosting growth and relieving pressure on struggling Italians, from reducing bills and red tape to increasing credit for businesses.

"There are many measures in the 'To Do' law," said Prime Minister Enrico Letta at a press conference, referring to the name given to the new decree which is expected to create 30 thousand new jobs in infrastructure alone.

"Many of them give Italians the possibility to carry out operations necessary to relaunch the country's economy," such as investing in machinery or taking on new workers in a move aimed at tackling high unemployment as well, he said.

The euro zone's third largest economy did worse than thought in the first quarter of this year, shrinking by 0.6 per cent instead of by the 0.5 per cent estimated previously, and the unemployment rate in April rose to 12 per cent.

Italy's youth jobless rate has spiralled and now stands at 40.5 per cent.

Mr Letta was quick to stress the new coalition government's unity in approving the measures - despite tensions in recent days over some of the more contentious proposals.

The decree allocates three billion euros ($4 billion) for public works projects this year, of which some 600 million euros will be invested in national rail.

Among measures aimed at easing the pressure of austerity programmes imposed in 2011 to ward off the euro zone debt crisis, energy bills will be reduced by 550 million euros - in part by cutting tax.

In an effort to protect homeowners, those who owe less than 120 thousand euros will not have their homes repossessed - unless they own more than one.

"To better relations between citizens and the state", the loathed national tax agency Equitalia will fight evasion "without a punitive attitude", becoming "a tax friend, particularly to those in difficulty," Interior Minister Angelo Alfano said.

Some 100 million euros have been earmarked for the upkeep of the country's school buildings, many of which are in dire need of repairs, in "an important signal to reassure families," Education Minister Chiara Carrozza said.

The decree law also includes measures to reduce red tape, in particular by making it easier for immigrants to obtain Italian citizenship.

Parliament now has 60 days to convert the decree into law, though the measures enter into force immediately.

Mr Letta said the government would introduce further measures to ease hiring rules and fight youth joblessness next week.