Italy's finance minister resigns

ROME, July 3 (UPI) -- Italy's Saturday cabinet meeting to discuss an emergency budget was canceled after Economy Minister Giulio Tremonti resigned.

The BBC reported the cabinet was set to discuss severe spending cuts to bring Italy under European Union imposed budget limits -- an issue that has divided Italy's governing coalition.

The EU wants Italy to bring its budget deficit to within 3 percent of gross domestic product, but the current deficit is forecast at 3.2 percent of GDP -- requiring cuts of about $7 billion.

The cuts are controversial because Italian Prime Minister Silvio Berlusconi has promised tax cuts to an electorate that voted heavily against his party in recent polls.