Prime Minister Mario Monti's government on Friday approved a decree law to boost stagnant economy in debt-crisis hit Italy.

The so-called "simplification decree," aimed at easing the Italian bureaucracy, will abolish or simplify hundreds of laws, facilitating the functioning of businesses, Monti told a press conference in Rome after the adoption of the package.

A better and more widespread use of online certificates and procedures will help cut costs and save time at public offices, he said.

Procedures for starting a new company will also become quicker, while it will be easier for students to communicate with universities and accede to competitive examinations.

"These measures will improve the economy's competitiveness," Monti said, adding his third set of tough reforms in two months will make the country more productive and strong, "unleashing its potential for growth and employment."

Last Friday, the government passed a set of reforms aimed at enhancing competition through gradually liberalizing many sectors, after pushing through 30-billion-euro (39 billion U.S. dollars) budget cuts in December.

The next step will be simplifying rigid labor laws, after Labor Minister Elsa Fornero will have completed talks with trade unions and employers.

On Friday, Italy sold 11 billion euros (14 billion U.S. dollars) of treasury bills, with lower yields than the previous sale.

Although Monti's measures helped restore markets' confidence in the third largest economy of the eurozone, the budget cuts and tax increases will deepen its expected recession, analysts said.

Earlier this week, the International Monetary Fund (IMF) forecast Italy's economy will contract by 0.3 percent in 2012, while euro area will drop a 0.5 percent in average this year.