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UPDATE: Italy Fin Min: Will Start Cutting Deficit In '10

BRUSSELS -(Dow Jones)- Italy plans to start consolidating its public finances next year, limiting the adjustment to 0.5 percentage points of gross domestic product a year, Finance Minister Giulio Tremonti said Tuesday.

"Everyone's going to have to take the medicine, and we're being told that we must be the first to take it, but that the dosage can be minimal," Tremonti told a press conference after the monthly meeting of European Union finance ministers in Brussels.

The European Commission is asking EU member states to put their accounts in order, after efforts taken to smooth the economic slump caused deficits to swell.

Thirteen of the euro zone's 16 members are exceeding the criteria of the growth and stability pact, which require that countries bring their budget deficit to below 3% of GDP.

Tremonti said he's concerned about recent developments on global financial markets, echoing concerns expressed elsewhere that the zero-interest-rate policies followed by central banks the world over may bring about another asset- price bubble.

"There's an enormous amount of liquidity, and some signs are worrisome, like the derivative markets, the value of stock markets, the [growing] public debt," Tremonti said.

-By Gabriele Parussini, Dow Jones Newswires; +33 1 4017 1766; gabriele.parussini@dowjones.com

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