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Italy’s Iron Lady batters Berlusconi government

May 27, 2010

By Guy Dinmore in Rome

Published: May 27 2010

Silvio Berlusconi, billionaire entrepreneur and prime minister, might well have expected an enthusiastic reception from Italy’s main business lobby on Thursday after announcing two days earlier his plans to slash government spending by €25bn ($31bn, £21bn) by 2012.

Instead captains of industry saved their loudest applause for Emma Marcegaglia, head of Confindustria, and sometimes called Italy’s Iron Lady. She used her most prominent speech of the year to tear into Mr Berlusconi’s centre-right government and the political establishment in general.

“Let me state this clearly,” she said as almost the entire cabinet listened uncomfortably in the front row of Rome’s main auditorium. “Politics gives jobs to too many people in Italy. It is the only sector that does not know either crisis or redundancy.”

“When the country has to make sacrifices, it is utterly unthinkable that the political class is not the first to slash their privileges . . .A cut of 10 per cent in the salaries of members of the government, seen from an international perspective, is a timid start,” she went on.

In the wake of a corruption scandal that has already cost the resignation of Claudio Scajola, industries minister, Ms Marcegaglia said all government contracts and tenders must have proper transparency so that “friends” do not end up with business “at inflated prices”.

Clearly taken aback by the harsh criticism, in which Ms Marcegaglia demolished government claims that Italy had fared better in this crisis than others and accused it of inflating the public sector, Mr Berlusconi took the podium and abandoned his own prepared speech.

Instead he tried to turn the tables and said Ms Marcegaglia had rejected his offer of the post left vacant by Mr Scajola. Turning to the packed auditorium he asked all those to raise their hands in favour of her joining the cabinet. Just a handful responded.

Mr Scajola, who denied taking €900,000 from a Rome building magnate to buy a luxury flat, resigned more than three weeks ago, leaving Mr Berlusconi as acting minister until a replacement can be found.

Businessmen said Mr Berlusconi looked lost and isolated, noting reports that Luca di Montezemolo, chairman of Ferrari and former Confindustria president, had also turned down approaches from the prime minister. Members of the audience congratulated Ms Marcegaglia on her forthright speech, although some said it did not go far enough.

Mr Berlusconi finds himself under pressure from both employers and workers. Guglielmo Epifani, leader of CGIL, the main leftwing trade union federation, said he would press for a one-day general strike and demonstrations next month in protest against the government’s austerity package that will freeze public sector wages for three years.

The package has gone down badly with the Italian public. Told to tighten their belts a decade ago so that Italy could adopt the euro that would end devaluations and inflations, people are questioning the government’s explanation that “sacrifices” are needed to save the currency.

Mr Berlusconi can at least take heart that international institutions have welcomed his austerity measures. IMF directors said they “strongly commended” the fiscal package.
●The joint reponse to the eurozone debt crisis has defeated a speculative attack on the euro, Mr Berlusconi said on Thursday at the Organisation for Economic Co-operation and Development in Paris, Reuters reports.

“Unfortunately, as far as countries with the euro as their currency are concerned, we are also facing an international speculative attack on the euro,” he said.

“We, the countries of the eurozone are united in replying with a multilateral response, which has practically defeated . . .  this international speculative attack,” he said.

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