Da Financial Times del 05/09/2006
Originale su http://www.ft.com/cms/s/7c2f1444-3c33-11db-9c97-0000779e2340.html

Prodi's reforms face rising discontent

di Tony Barber

Rome - Romano Prodi, Italy's prime minister, on Monday sought to calm growing unrest in trade unions and on the left wing of his ruling coalition over plans for budget cuts and pension reform.

Mr Prodi defended his proposals in front of parliamentary leaders of the nine parties in his centre-left government and then repeated the exercise at a lunch for leaders of Italy's three main union movements.

The confrontations were a sign that, less than four months after he took office, Mr Prodi may soon face as much trouble from his nominal allies on the Italian left as he does from the centre-right opposition led by Silvio Berlusconi, the former premier.

Unions are preparing massive disruption to Italy's transport systems this month, with a strike on Thursday in the air sector to be followed by shutdowns of municipal public transport on September 15 and the national railway network on September 27.

The planned protests highlight Mr Prodi's difficulties as he tries to restore order to Italy's public finances and introduce long overdue structural reforms in the economy.

While international financial markets and the European Commission regard such measures as essential, Mr Prodi must take care not to lose the support of the leftist elements in his coalition on which he depends for his slim parliamentary majority.

Labour unrest in the transport sector was common under Mr Berlusconi and often had specific local causes, but there was no mistaking the discontent that has arisen on the Italian left because of Mr Prodi's fiscal and welfare initiatives.

"Now is the time to make the speculators pay, not the pensioners and workers," said Alfonso Pecoraro Scanio, environment minister and leader of the Green party, in one comment typical of the left's displeasure.

Tommaso Padoa-Schioppa, Mr Prodi's finance minister, offered an implicit sop to the left last week by trimming the planned spending cuts in Italy's 2007 budget to €30bn from €35bn ($45bn, £24bn), but he received little thanks for his gesture.

Communist and other leftist members of the ruling coalition maintained that, given an unexpected boom in tax revenues this year, Mr Padoa-Schioppa could afford to be more generous. Financial markets, alert to any sign of weakening fiscal discipline in Italy, argued the opposite.

Still more serious for Mr Prodi is the risk of a clash with the left and the unions over reform of Italy's overburdened state pension system, which absorbs about 14 per cent of gross domestic product.

Under a modest change passed by the Berlusconi government, Italians who can retire after 35 years of paid work at the age of 57 will, from 2008, have to wait until they are 60 before they can claim an anzianità, or seniority, pension.

The Prodi government has yet to formulate its reform proposals, but it will certainly have to take into account new data from Istat, Italy's national statistical institute, which point to a sharp rise in the elderly population in coming years.

Istat predicts Italy will have almost 17.5m people over the age of 60 in 2016, compared with only 14.7m today.

However, union leaders are promising stiff resistance.

"On pensions the unions will be united, because it's the rights of workers that are at stake," said Renata Polverini, general secretary of the UGL union.

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