Italian opposition unite in protest over welfare cuts

Even before full details of the centre-left coalition's 1998 budget had been published, the Italian government's hard-left allies and the opposition centre-right bloc were already howling in protest.

The opposition leader, Silvio Berlusconi, said the measures would hurt the nation, the far-right National Alliance party accused the Prime Minister, Romano Prodi, of lying and the Communist Refoundation party said a golden opportunity had been wasted.

Ironically, the package seeks just 25 trillion lire (pounds 9.18bn) in deficit cuts - the smallest belt-tightening budget presented by any government since 1990.

But Refoundation, which guarantees Mr Prodi's majority in the lower house of parliament, felt the country had suffered too much tough budgetary medicine and was furious the government had pushed ahead with plans to hack back for the 1998 welfare bill.

Details of the cuts will not be announced until a deal has been struck with unions in the coming weeks, but Refoundation's leader, Fausto Bertinotti, has already made up his mind. "Our first impression is this: We just don't buy it. We can't agree to this." he said.

Refoundation has said it will fight any attempt to cut pensions, expected to be the mainstay of around 5 trillion lire of planned welfare savings, even if this meant pulling support from Mr Prodi and sparking a crisis. In a bid to sweeten the bitter pill of welfare cuts, the government promised 5 trillion lire to boost the depressed southern economy, but Refoundation said it was not enough and demanded a shorter working week to help create jobs.