* FTSEurofirst 300 up 0.02 pct, Euro STOXX 50 up 0.2 pct
* Italian stocks trim recent sharp gains
* UK insurers hurt by budget measures
* Spain's IBEX outperforms as Inditex reassures
PARIS, March 19 (Reuters) - European shares held steady on Wednesday, although Italian stocks fell in strong volumes as Prime Minister Matteo Renzi said the European Union's budget deficit limit of 3 percent of economic output was outdated.
Shares in UK insurers also slid, hurt by government plans to scrap a requirement that pension savings be used to buy an annuity. Legal & General was down 13 percent and Aviva down 7.5 percent after UK finance minister George Osborne announced the plans as part of the UK budget.
At 1528 GMT, the FTSEurofirst 300 was up 0.03 percent, at 1,306.34 points, while the euro zone's blue-chip Euro STOXX 50 index was up 0.2 percent at 3,078.78 points.
Milan's benchmark index FTSE MIB was down 0.4 percent in volumes nearly twice as much as its daily average volume, trimming recent lofty gains, with Generali, UniCredit and Telecom Italia down 0.8-1.4 percent.
"The 3 percent parameter is, objectively, an anachronistic parameter," Renzi told the Italian parliament on Wednesday, adding however that he would respect Italy's pledges to remain within the 3 percent threshold.
Despite the day's dip, the MIB is still up 10.4 percent in 2014, outpacing the broad FTSEurofirst 300 which is down 0.7 percent year-to-date, as investors bet on the country's economic recovery from its worst recession in 70 years.
"There's been a strong outperformance of the Italian market in the past few weeks, the market has been very resilient throughout the Ukrainian crisis, so it's logical to have a bit of profit taking today after such a rally," said Andrea Tueni, sales trader at Saxo Banque.
Bucking the trend, Spain's IBEX rose 0.6 percent, with Inditex adding 4.2 percent after the world's biggest fashion retailer posted strong sales so far this year and announced a pick-up in store openings.
Overall, investors avoided strong bets ahead of the end of the Fed meeting. Analysts said a further cut in the central bank's monthly bond purchases by $5 billion was largely factored in, but the market would look for hints about the speed of future cuts and whether the Fed provides new guidance on when it might eventually raise interest rates.
"There is always some nervousness ahead of the Fed meeting. We expect the tapering process to continue and there is likely to be some guidance around the unemployment rate and future U.S. rate rises, although we still don't expect the first rate hike until July 2015," Barclays Wealth strategist Henk Potts said.
Europe bourses in 2014: link.reuters.com/pad95v
Asset performance in 2014: link.reuters.com/rav46v
Today's European research round-up (Additional reporting by Atul Prakash in London; Editing by Hugh Lawson)