By Giuseppe Fonte

ROME, April 30 (Reuters) - The Italian government will on Tuesday unveil an economic package focused on temporary tax breaks to firms that hire staff on open-ended contracts and a cash bonus of up to 100 euros ($107) for low earners, officials said.

The measures, which could pile further pressure of Italy's creaking public finances, are being proposed about a month before European elections which will test the popularity of Prime Minister Giorgia Meloni's right-wing coalition.

Italy in 2023 posted the widest budget deficit in Europe as a proportion of gross domestic product (GDP), and the government says public debt, already the second highest in the euro zone, will rise further through 2026.

One incentive aims to encourage employers to permanently hire women or people under the age of 35 by cutting the social security contributions firms would have to pay for these workers over two years.

The scheme is part of a wider decree aimed at speeding up the spending of cohesion funds, which for Italy amount to 75 billion euros between European Union and domestic resources.

A separate decree allows companies, for 2024 only, to reduce their taxable income by up to 130% of the costs incurred for newly hired permanent employees, so long as their overall workforce increases compared to last year.

This subsidy was announced late last year but has not yet come into force. At the time, the Treasury estimated its cost at some 1.3 billion euros, saying it would be funded by removing an allowance granted to banks and other firms that boost their capital, the so-called Allowance for Corporate Equity (ACE).

Under the cash bonus initiative, families that include at least one child and have an income no higher than 28,000 euros per year will be given up to 100 euros next January, the officials said.

The government has previously said the bonus can be financed through a deal with tax dodgers, scrapping penalties against those who come clean about how they have avoided taxes, and agree to pay what they owe.

Meloni has repeatedly sought to come to terms with tax evaders since coming to power 18 months ago, an approach critics say sets a bad example and lowers revenues in the long term.

Tuesday's package is also expected to raise the tax rate on productivity bonuses of up to 3,000 euros to 10% from the current 5%, effective from January 2025.

($1 = 0.9343 euros) (Editing by Gavin Jones and Timothy Heritage)