Italy’s new PM Letta vows to focus on growth
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Italy’s new Prime Minister Enrico Letta said his government would act quickly to implement growth policies to reverse an austerity drive in his maiden speech to parliament on Monday, and vowed results within 18 months or “take the consequences.”
Italy's new Prime Minister Enrico Letta said Monday his coalition government would act fast to reverse an austerity policy that he argued was killing Italy. Letta also called on Europe to become a motor for growth.
"Italy is dying from austerity alone. Growth policies cannot wait," Letta said during his inaugural speech to parliament, under the watchful gaze of European partners.
Italy’s new government has easily won a confidence vote of confirmation in the lower house of Parliament.
Premier Enrico Letta’s coalition of rival political blocs won the backing of the Chamber of Deputies on Monday night in a mandatory confidence vote on his coalition. The Chamber voted 453 to approve the government, and 153 voted no.
The government faces a required second vote Tuesday in the Senate, where Letta’s center-left forces don’t have the majority. But media mogul Silvio Berlusconi’s center-right party, which is part of the tense coalition government, is expected to give Letta sufficient backing.
The recession-hit country, effectively rudderless since an inconclusive election in February, is under pressure to act fast to tackle social, economic and institutional ills.
The leftist moderate, who was sworn in with his cabinet on Sunday, promised to have results in 18 months or "take the consequences."
“He started off by saying that Italy is facing one of the most complex and painful periods in history since World War II,” FRANCE 24’s Rome correspondent Seema Gupta reported.
He said the economic situation in Italy -- one of the first countries to fall prey to the eurozone debt crisis -- "is still serious" and its two-trillion-euro ($2.6 trillion) debt "weighs heavily" on ordinary Italians.
Change the focus
But he also looked to Europe, and said that it “needs to change the way it approaches the crisis, that there has to be a greater focus on growth,” Gupta reported.
The 46-year-old moderate from the centre-left Democratic Party said he wants to deal quickly with the social fallout of the longest economic slump in 20 years by tackling a jobless rate of 11.6 percent and regulating temporary job contracts.
He also said a controversial housing tax imposed by Monti would be suspended from June - though he did not mention the refund former premier Silvio Berlusconi had been pushing hard for.
Letta said the political class had to react to the growing anti-establishment voice in Italy, which was driven by anger over politicians' perks at a time of widespread financial difficulties.
The government's first act would be to cut the salaries of ministers who are also members of parliament, and are therefore currently eligible for two salaries, he said, a move that could “appease some of the frustrations that Italians feel,” Gupta added.
The markets reacted favourably to Letta's speech, with Milan stocks up around two percent afterwards.
Letta "symbolises a new generation in Italian politics and a less partisan approach," Unicredit chief economist Erik Nielsen said.
Letta's success will also rely on ensuring the continued support of the political parties and he will have to work to keep his own party from imploding after a deeply damaging rebellion last week.
The government will go to a confidence vote in the lower house of parliament later Monday with a vote in the upper house Tuesday.
Analysts say the coalition is likely to last long enough to push through key reforms - including a revision of the complex electoral law which created the deadlock - but may be brought down by sparring parties within a year or two.
Some fear a resurgent Berlusconi - who installed his protege Angelino Alfano as the government's number two - may withdraw his support once he believes he could win a fresh poll.
(FRANCE 24 with wires)