"Italy Goes on Strike Over Economy"

John Hooper, The London Guardian

Millions of Italians stopped work yesterday in protest
at the economic policies of Silvio Berlusconi's
government. A nationwide half-day stoppage crippled public
transport and shut factories and banks. Alitalia
cancelled more than 100 flights. Government departments and post offices were shut all
day. Doctors and nurse also staged an eight-hour
strike, though emergency services were maintained.

The action was originally called by the main trade
union federations, and backed by the opposition, to
protest at an austerity budget for 2005 that imposes
sacrifices worth €24bn in the form of
spending cuts and additional levies.But last Saturday Mr Berlusconi wrong-footed his
critics by persuading his ministers to agree to
€6.5bn of tax cuts — a measure which polls suggest
has given his popularity ratings a much-needed, if so
far modest, fillip.

The weather yesterday worked against the opposition.
Most of the 70-odd demonstrations around the country
organised by the trades union federations took place in
driving rain.

In Rome, Romano Prodi, making a comeback as unofficial
leader of the Italian opposition, declared the strike
was "not just 'anti', but a way of bringing everyone
together to prepare something better for the future".

Mr Berlusconi was voted into office largely because
Italians believed the billionaire-turned-politician
could bring his Midas touch to bear on Italy's
sclerotic economy.

Three years on, and despite reforms of the pension
system and the labour market, Italy still has one of
the lowest growth rates in Europe. A string of high-
profile corporate failures, most recently that of the
low-cost airline Volare, have highlighted underlying
problems in the Italian economy.

Both the employers' federation and a small trade union
federation close to Mr Berlusconi's government have
recently been critical of its policies.

The prime minister had promised tax cuts before the
2001 election, but has been constrained in part by
Italy's membership of the euro, which commits the
government to prudent fiscal housekeeping.

Mr Prodi predicted yesterday that the tax cuts
announced last weekend would force the government to
demand further sacrifices next year if it was to keep
its word to its euro-zone partners.

He challenged the government's contention that it had
found the money to pay for the tax cuts. "The €6bn
the government talks about isn't there," Mr Prodi said.

Trade union leaders, meanwhile, concentrated their fire
on the way the tax cuts are to be shared out. Savino
Pezzotta, who leads the CISL, Italy's second-largest
labour federation, said that next year's budget would
"give more to those who have most and less to those who
have least".

High-income single people will be particularly favoured
by the tax cuts, which offer almost nothing to the
lowest earners. But the budget will also bring relief
to middle-class families.

Mr Berlusconi is clearly hoping it will help his party
to recover some of the voters who have deserted it in
recent polls, significantly weakening his own clout
within the coalition he heads.