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Rome could be about to follow in footsteps of bankrupt Detroit, after the country's new government scrapped a measure that would have helped with the Italian capital's budget deficit.

Italy's central government – under new Prime Minister Matteo Renzi – announced on Wednesday it would be dropping a bailout package designed to help plug city's gnawing €816 million ($1.17 billion) budget gap.

Rome's Mayor Ignazio Marino responded to the move by saying "In March there won't be money to pay 25,000 city employees, to pay for fuel for the buses, to keep the nurseries open, to collect rubbish or to organize that canonization of the two popes, an event of a planetary scale" the Italian news agency ANSA reported on Thursday.

He also threatened to bring the city to a halt if the government failed to him answers – warning the ceremony for the canonisation of Popes John Paul II and John XXII on April 27 was at risk.

Italy's new government – which was sworn in last Sunday --is currently working on another package of aid to provide basic funding for services, Marino said, according to the Italian news agency ANSA.