Berlusconi faces tough battle on reform plan

A DAY after Italian prime minister Silvio Berlusconi presented EU partners with a detailed package of reforms to steer Italy …

A DAY after Italian prime minister Silvio Berlusconi presented EU partners with a detailed package of reforms to steer Italy though the global financial crisis, he discovered just how difficult it may be to convince the parliamentary opposition and trade unions to accept key elements of the plan.

While the immediate Europe-wide market reaction to Wednesday night’s marathon summit was positive, reaction in Italy was much more cautious.

Commentators, depending on their political orientation, bitterly disagreed on just how effective the prime minister had been in Brussels.

While the morning radio news on state broadcaster RAI spoke of how Italy had passed its EU test with flying colours, some political commentators were less convinced, pointing out how Italy would henceforth be “monitored” and suggesting that the 14-page package presented in Brussels was neither realistic nor realisable.

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“It’s hard to see how this letter of intentions can really be transformed into the biggest plan of market reforms Italy has ever put on paper,” commented the Corriere Della Sera newspaper.

Leftist La Repubblica was even more outspoken, calling the plan a “book of dreams” and saying it “does not solve the country’s problems”.

“This is the economic programme of a government that can no longer govern,” the newspaper said. (On Wednesday, the government was defeated in parliament for the 94th time since the beginning of the legislature.)

Many commentators express perplexity about the lack of consultation with the social partners prior to Wednesday’s summit.

Many predict virulent opposition to proposals such as pension reform, public-sector job cuts, greater worker mobility, privatisations and especially to a measure that would make it easier for companies to lay off workers in times of economic crisis.

Furthermore, there is scepticism about the government’s ability to deliver on a much-delayed growth development plan by November 15th.

Susanna Camusso, leader of leftist union CGIL, argued yesterday that the government had “neither the strength nor the political will” to enact the package but that, “in the meantime, it will continue to use its power to resolve private problems”.

Ms Camusso said the trade union movement must unite and “react against this nightmare of a package”.

While government majority figures continue to deny that Wednesday’s package was the result of a “deal” done by Mr Berlusconi with his long-time ally, Senator Umberto Bossi of the Northern League, opposition forces argued that in reality the package was merely the precursor to an early election next March.

Opposition forces yesterday called on the government to “urgently” address parliament on the contents of the package and to confirm, once and for all, if it had the blessing of Italian finance minister Giulio Tremonti.

Much media speculation has suggested that Mr Tremonti, reportedly at loggerheads with Mr Berlusconi, had little input into it.

For his part, Mr Berlusconi tried to downplay the widespread criticism, arguing that “Italy is not Greece” and that the proposed measures were sustainable and would “not lead to any social turmoil”.

He called on opposition forces to join him in approving measures that “matter both to Europe and to the opposition”.

At first glance, however, the opposition reaction was extremely negative with Democratic Party leader Pier Luigi Bersani describing parts of the package as “totally unacceptable”.

Perhaps, if and when he addresses parliament, Mr Berlusconi will also be asked about reports claiming that he addressed the astonished gathering of EU leaders on Wednesday night on the subject of the iniquitous inventions of the media and the magistrates investigating his alleged “bunga bunga” private party nights.

THE PACKAGE WHAT ITALY HAS PROMISED

Pensions – the pensionable age to be raised for everyone to 67 by 2026;

Sales of State assets (State enterprises and real estate) expected to generate €15 billion over next three years;

Redundancies of full-time, salaried employees to be made more flexible in times of economic crisis. This to be introduced by May 2012;

Public sector workers will be obliged to accept greater "mobility" (regarding where they work) to make the public services more efficient, transparent, flexible and less expensive";

Detailed growth plan to be delivered by November 15th;

Measure requiring State budget to be balanced to be written into the Constitution by June 2012;

Renewal of a promise to abolish Italy's provincial administrations;

The strengthening of the antitrust authority's powers to sanction unfair competition, especially at local authority level;

New measures for business to start infrastructure projects, largely dependent on private funding;

More efficient use of EU funds, especially with regard to southern Italy;

Liberalisation of retailing regulations with particular relevance to gas stations and car insurance.