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Europe

Berlusconi to present new reforms at Eurozone meeting

Text by News Wires

Latest update : 2011-10-26

Italian Prime Minister Silvio Berlusconi was set to attend a key Eurozone bailout meeting in Brussels on Wednesday, bearing a 15-page letter outlining plans for fresh economic reforms.

AFP - After two days of intense negotiations amid talk of a possible government collapse, Italy's Prime Minister Silvio Berlusconi will go to European allies in Brussels Wednesday with promises of fresh economic reforms.

Berlusconi will take with him a 15-page letter outlining plans for reforms, including a last-minute agreement with his Northern League coalition partner to raise the retirement age from 65 to 67 in 2026, Italy's media said.

The decision actually changes little because retirement age in Italy in 2026 will already be close to 67 due to reforms adopted over the last few years which compensate for growing life expectancy, according to the newspapers.

The League, however, stubbornly rejected any plans to change the current system whereby workers can retire after 40 years of contributions regardless of age -- a key issue for voters in its northern Italy stronghold.

Berlusconi will also pledge to rush through growth-boosting measures which the government had promised this summer but which have been repeatedly delayed by infighting within the coalition, the reports said.

Alarmed by the country's 1.9 trillion euro debt mountain -- 120 percent of its GDP -- EU leaders demanded Berlusconi take action and produce fresh reforms before the Wednesday 1600 GMT eurozone summit.

Widespread embarrassment in Italy over the EU's public warnings to sort out its economy and fierce wrangling within the fractious coalition has sparked talk the government may fall.

While Berlusconi's People of Freedom party supported modifying the pension system, the League had threatened to pull out of the coalition and bring down the government if extensive changes were made.

According to unsourced reports in La Repubblica and La Stampa newspapers on Wednesday, Berlusconi secretly promised League leader Umberto Bossi he would call early elections in March in exchange for support on pension reforms.

The premier has faced intense pressure from European allies to prove Italy will not become the next Greece, needing an even bigger debt bailout than Athens and potentially jeopardising the whole eurozone.

Date created : 2011-10-26

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