Slovenia's government has formally approved an agreement it reached with trade unions to cut public sector wages by up to 4.8 percent as part of budget austerity measures the country needs to avoid an international bailout.

The agreement, which was confirmed Thursday, is expected to save 108.6 million euros ($141 million) this year and 182.6 million euros in 2014 for debt-laden Slovenia, which is struggling to avoid becoming the sixth of the 17 European Union countries that use the euro to need financial aid.

Interior and Public Administration Minister Gregor Virant says Slovenia also needs to improve the tax system and move to abolish the so-called gray economy.

Slovenia's lawmakers will also vote on the deal next week.