ROME: Italy's government has allocated 500 million euros ($547.5 million) over the next three years to pay for job cuts at banks, a government source told Reuters on Thursday.

The 2017 budget includes 100 million euros, which will increase to 200 million euros per year in 2018 and 2019, to cover the costs of early retirement, the source said.

Banking unions estimate more than 20,000 bank employees are due to leave the workforce by 2020, as agreements on early retirement come into force.

Several Italian banks have also announced job cuts to rein in unsustainable costs.

Copyright Reuters, 2016