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Berlusconi on edge over cuts plan

Pressure is growing on Italy's embattled premier Silvio Berlusconi as he struggles to win support for a vital emergency growth plan.

Mr Berlusconi has survived scandals, court cases and dozens of confidence votes, but experts say the economic plan will be one of the most critical tests yet of his grasp on the country's leadership.

Eurozone governments are trying to come up with a comprehensive plan to tackle their debt crisis by Wednesday. As part of that, they demanded that Italy draft new economic measures by then, arguing it would be pointless to protect the country from market turmoil if it did not pull its weight.

EU officials say they will not present their comprehensive plan, upon which global markets are pinning their hopes for the survival of the euro, if Italy does not agree to new economic measures.

But Mr Berlusconi has found little support within his coalition. Crucially, he faces resistance from his powerful ally, the Northern League, a minority coalition party led by Umberto Bossi and without whose support his government falls.

"Mr Berlusconi has an immovable object at home which is Bossi and the Northern League, and an unstoppable force abroad which is the European Union, so he's in a very, very difficult position," said James Walston, a political science professor at American University in Rome.

Mr Berlusconi was locked in meetings with Finance Minister Giulio Tremonti and key party members in Rome, but there were no immediate reports of progress.

A Cabinet meeting to draft the emergency growth measures ended on Monday evening in silence - a clear indication of discord within the government majority.

The European Union wants Italy to raise its standard pension age from 65 to 67, change the legal system to encourage investment and pass other reforms to improve growth. All are measures that have been talked about for years in successive governments, but there has been little political will to see through the unpopular decisions.

The Northern League, whose constituency is made up of workers in productive northern Italy, staunchly opposes raising the pension age.


From Belfast Telegraph