Silvio Berlusconi seeks growth to calm markets

Prime Minister Silvio Berlusconi is to meet unions and employers today after a speech to parliament aimed at quelling fears that escalating market turmoil could drag Italy into a full-scale debt crisis.





Reaction to Berlusconi's speech yesterday was generally critical. With expectations growing that the European Central Bank may step in and buy Italian and Spanish bonds, markets rallied at the opening before falling back later in the morning.



Berlusconi, who spoke after the close of trading yesterday, said Italy's fundamentals were sound but that markets had not appreciated the strength of its banks and the underlying solidity of its economy.



"It was legitimate to have expected much more from the prime minister's speech in parliament," Corriere della Sera, Italy's leading daily said in a front page editorial.









In his speech yesterday, Berlusconi called on all sides to help pass reform, but he offered few details and made no promise to bring forward the government's target of restoring the budget to balance by 2014 with extra cuts in spending.



Long sheltered by a perception that its public finances were under control and its banking system solid, Italy, the euro zone's third biggest economy, now risks being sucked into a Greek-style emergency that could overwhelm the whole bloc.







With Berlusconi mired in scandal and facing four separate trials on charges ranging from fraud to paying for sex with an underage prostitute, there have been growing calls for change and a clearer reform agenda.



In an interview with Italian news agency ANSA, Fiat chief executive Sergio Marchionne, one of a small group of Italian executives with genuine international standing, said the situation in Italy was becoming intolerable.



"We cannot allow this confusion to go on. We need stronger leadership to restore credibility to this country," he said.



"Obviously it's not up to me to name names, that's not my job, but the world doesn't understand this confusion, doesn't understand what's happening in Italy, and that's really hurting us a very great deal."



The opposition has repeated its calls for Berlusconi to step down and make way either for elections or a so-called "technical government" of experts to steer Italy through the crisis.



Berlusconi has flagged his meeting with unions and employers today as a chance to establish the basis for broad reforms in areas like labour law and regulation. Unions have already reacted sceptically.



Italy has had one of the world's slowest growing economies for more than a decade with growth well below the levels needed to cut into a public debt mountain now equivalent to around 120 per cent of gross domestic product.



Economists and bodies such as the International Monetary Fund have long urged Italy to ease market restrictions on products and services and introduce more flexible employment rules to spur growth and employment.



Last month, parliament passed a 48-billion-euro austerity plan, but the programme has been widely criticised for delaying the bulk of the measures until after elections due in 2013 and for doing little to revive the sluggish economy.

Reuters

Start your day with The Independent, sign up for daily news emails
News
Jeremy Clarkson
people
News
Ben Little, right, is a Labour supporter while Jonathan Rogers supports the Green Party
general election 2015
News
The 91st Hakone Ekiden Qualifier at Showa Kinen Park, Tokyo, 2014
news
Life and Style
Former helicopter pilot Major Tim Peake will become the first UK astronaut in space for over 20 years
food + drinkNothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
ebooks
ebooksA special investigation by Andy McSmith
News
Kim Wilde began gardening in the 1990s when she moved to the countryside
peopleThe singer is leading an appeal for the charity Thrive, which uses the therapy of horticulture
Sport
Alexis Sanchez celebrates scoring a second for Arsenal against Reading
football
Life and Style
health
Voices
An easy-peel potato; Dave Hax has come up with an ingenious method in food preparation
voicesDave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
News
i100
News
Japan's population is projected to fall dramatically in the next 50 years (Wikimedia)
news
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Project Implementation Executive

£18000 - £23000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Chiropractic Assistant

£16500 per annum: Recruitment Genius: A Chiropractic Assistant is needed in a ...

Recruitment Genius: Digital Account Executive - Midlands

£18000 - £26000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Web Developer

£28000 - £30000 per annum: Recruitment Genius: This company provides coaching ...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own