Premier Enrico Letta said his coalition will ease up on austerity in order to drag the pivotal eurozone economy out of its downward spiral of recession and job losses. In his first speech to parliament as Prime Minister on Monday, Mr Letta said: “Italy is dying from austerity alone. Growth policies cannot wait.”
The Economy minister Fabrizio Saccomanni indicated on Sunday that he wanted a pact with banks, businesses and consumers to boost growth. Mr Letta, no doubt with one eye on the anti-establishment Five Star Movement (M5S) of Beppe Grillo that polled a quarter of the vote in the February election, said the political establishment had “one last chance” to tackle Italy’s deep economic and social woes.
His government was this evening expected to win the first of two confidence votes it needs to begin parliamentary business. Mr Letta’s task will be made more difficult given the unlikely nature of his cabinet, which consists of members of his centre-left party, along with centre-right representatives and some technocrats. He described his government as “David before Goliath-sized challenges”.
The strong influence former premier Silvio Berlusconi exerts over the administration has already become clear with Mr Letta giving in to his demand that the unpopular Imu property tax be ditched. This pledge will leave another €8bn (£6.75bn) hole in Italy’s finances.
Meanwhile, the German Chancellor Angela Merkel has rung Mr Letta, who will be in Berlin on Tuesday, to wish him good luck.