Italian Prime Minister Silvio Berlusconi on Saturday ruled out calling early elections to stem market panic that has pounded Italian assets and forced his government to bring forward austerity measures, according to Reuters. Berlusconi's conservative government has been weakened by infighting, and the leftist opposition has called for a government of technocrats to restore credibility in the country's finances. Italy is due to go to the polls in 2013. But Berlusconi dismissed any suggestion of emulating Spain, where Prime Minister Jose Luis Rodriguez Zapatero has called an early election to tackle the crisis. "This has absolutely not been talked about," Berlusconi said when asked about bringing elections forward to 2012. "This has never been an option." Fears over the euro zone debt crisis spiralling out of control sent Italian bond yields to 14-year highs and the Milan bourse to more than two-year lows this week. European policy makers fear a debt emergency in the euro zone's third largest economy could overwhelm bailout mechanisms set up to help smaller troubled countries such as Greece or Ireland. After vague pledges to step up economic reforms failed to convince markets earlier in the week, Berlusconi promised on Friday to bring forward austerity measures and balance the budget by 2013, a year ahead of schedule. A 48 billion euro austerity plan passed in parliament last month was widely criticised for delaying most cuts until after the scheduled 2013 elections and doing nothing for growth. The latest pledge got a frosty reception from the opposition and Italy's biggest union, but was welcomed by analysts and the European Union's top economic official. "This will help to boost potential growth, secure budgetary retrenchment and bolster market confidence," European Economic and Monetary Affairs Commissioner Olli Rehn told Reuters in the first EU response to Berlusconi's announcement. "The essential thing is rigorous implementation." WASTE PAPER Umberto Bossi, the head of the powerful Northern League party in Berlusconi's coalition, said speeding up reforms had guaranteed that the European Central Bank would buy Italian bonds and prevent them from becoming "waste paper". But ECB sources told Reuters the central bank remains divided over whether to buy Italian government bonds and that even some of those who favour the move want Italy to do more to frontload austerity measures. Reaction from analysts was largely positive. Italy had taken the first step to shoring up confidence by accelerating reforms, even if it still had to translate that into action, they said. "This is the response we were hoping to see and there are no doubts that the government pledged to deliver what has been called for, to say the least," UniCredit economist Chiara Corsa said in a note. "If this (is) enough to calm markets depends on whether the market believes it or not, but today's decisions by the Italian government are certainly a step in the right direction." Both Berlusconi and Economy Minister Giulio Tremonti sounded more credible than they did just a few days ago, Barclays Capital analysts said. The leftist opposition -- whose position has strengthened in recent months as Berlusconi confronted squabbling partners, a stagnant economy and a high-profile trial on charges of paying for sex with a teenager -- was more sceptical. "Italy has a political problem," said Pier Luigi Bersani, leader of the opposition Democratic Party, suggesting that poor Italians would bear the brunt of the austerity measures. "And if this problem is not resolved, it will burn through any sacrifices Italians make." The head of Italy's largest union, CGIL, attacked the austerity plan, underlining the challenges Berlusconi faces in getting broad agreement for structural reforms of the labour market that are needed to kickstart growth. "With this government, with this austerity budget, no social pact is possible," CGIL leader Susanna Camusso told L'Unita newspaper. "Bringing forward the austerity measures means killing the country."