Italian politicians weigh Monti's rescue plan

December 1, 2011 - 8:45 AM
Belgium EU Financial Crisis

Italy's Prime and Economy Minister Mario Monti addresses the media at the European Council building in Brussels, Wednesday, Nov. 30, 2011. European Union finance ministers have their regular monthly meeting overshadowed by the continuing financial crisis hitting the continent. (AP Photo/Yves Logghe)

ROME (AP) — Italian Premier Mario Monti's financial rescue plan is yet to be finished, but that hasn't stopped unions from denouncing it and some politicians expressing doubts as to whether they can back the anticipated harsh measures to save Italy from bankruptcy.

Unions seemed particularly galled that Monti, in his rush to reassure markets about Italy's ability to rein in its debt and spur growth, is doing away with the government's traditional negotiations with them over any change to labor regulations or pensions.

Monti told reporters Wednesday in Brussels that time constraints and the "extraordinary delicate situation" Italy is struggling through doesn't allow for "certain rituals that might be welcome by everyone, but perhaps aren't advantageous to the country."

He promised that his Cabinet on Monday would approve a package of spending cuts to slash towering debt and structural reforms to spur growth. He called for a "collective sense of urgency and responsibility" among lawmakers to facilitate passage in Parliament.

The new premier is under tremendous pressure to rein in Italy's euro1.9 trillion ($2.6 trillion) in debt load — 20 percent larger than its annual economic output. The country, which is the eurozone's third-largest economy, is considered to be too big to be bailed out.

An Italian default would be disastrous for the 17-member eurozone and reverberate throughout the global economy.

Susanna Camusso, head of Italy's largest labor confederation, the left-leaning Cgil, has demanded a meeting with the government before the Cabinet clears the new measures.

Unions have attacked Monti's vow to overhaul Italy's generous pension system. News reports suggest his plan includes a proposal to add at least a year to the 40 years now required for contributions before being able to retire.

"The government must know that 40 is the magic, untouchable number," Camusso said.

The center-left Democratic Party is also skeptical about what might be proposed, arguing that flexibility must be built into the system to account for different types of labor and the age at which someone started working.

"Such a drastic intervention on this front seems like an error," said Democratic lawmaker Paolo Baretta in an interview with Rome daily Il Messaggero.

Silvio Berlusconi, who was forced to resign as premier because markets lost confidence in his ability to push through reforms, huddled with his allies into the early hours of Thursday to map strategy. His conservative allies fear a rumored special tax on wealth and the return of a home property tax.

"We're ready to do our part to support Monti's government to get out of the crisis," said Maria Stella Gelmini, Berlusconi's ex-education minister and a member of his People of Freedom Party. But she said the party had told Monti they were "perplexed" about the proposed taxes.

The unelected Monti, who was tapped by Italy's president to lead the country out of the crisis, needs lawmakers' support for his rescue plan. In an indication that he knows that too well, he congratulated the lower Chamber of Deputies on Thursday for having approved — by a "vast margin" — the first reading of a months-long legislative process to amend the nation's constitution to require a balanced state budget.

He said the support showed "the firm will of Parliament and the whole country to follow the path of structural health in public finance." In a statement, he said such political will, at the national and EU level, will be a "decisive element to overcome the current difficult financial crisis that has seized Europe."