"It's clear that everyone has to make sacrifices," Renzi said, as government-mediated talks between the airline's management and unions continue over plans to axe 2,200 jobs.
"It's not about 'x' number of jobs or 'y' number of jobs being cut. It's about that or closure," he said.
Renzi praised the Etihad proposal saying it would give Alitalia "enormous potential for growth in the future".
But he added: "Now is the time for belt-tightening."
Unions have asked the company to go for salary reductions and temporary layoffs instead of permanent redundancies.
Emirates airline Etihad Airways is planning to buy a 49-percent stake in the debt-laden Italian company. Bankruptcy for Alitalia would have a severe financial and psychological impact on Italy which is struggling to climb out of a deep recession that lasted more than two years.
Alitalia, which employs 12,800 people, is owned by about 20 companies - all of which are private except the Italian postal service which acquired an interest of 19.48 percent last year during a capital increase.