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Can Berlusconi Deliver On Debt-Crisis Promises?

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Can Berlusconi Deliver On Debt-Crisis Promises?

Economy

Can Berlusconi Deliver On Debt-Crisis Promises?

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RENEE MONTAGNE, HOST:

Now for the second act in the drama of the eurozone crisis: Italy's economy. Italy's prime minister promised European leaders he would come up with solid proposals to show his country can reduce its mountain of debt, stimulate its economy, and avoid a bailout.

Today, Silvio Berlusconi appears before the Group of 20, clutching a vague list of anti-crisis measures - measures not likely to calm nervous markets or satisfy his E.U. partners. NPR's Sylvia Poggioli reports from Rome.

SYLVIA POGGIOLI, BYLINE: After a feverish day of emergency meetings and a late-evening cabinet session in Rome, the only news that emerged was a terse statement that gave no details of the measures that had been decided. Instead, a statement that just listed measures that include divesting state-owned real estate, privatizing local public companies, and measures to encourage investment in infrastructure.

The measures won't go into effect immediately, but will be tacked on as amendments to an economic stabilization bill currently before Parliament. Last week, Berlusconi had also promised German Chancellor Angela Merkel and French President Nicholas Sarkozy radical measures, including making it easier to fire workers, reforming the pension system, and widespread privatization of state-run enterprises. These are extremely contentious issues in Italy, and are beginning to undermine the fragile government coalition.

In the past year, Berluconi has been accused of holding on to a slim majority, thanks to offering posts to wavering M.P.s. But commentator Beppe Severgnini believes it will be much harder to win parliamentary approval of such radical reforms.

BEPPE SEVERGNINI: To slash red tape, to reform the justice system, to sell off state assets, and to make hiring and firing much easier - I mean, there is no way you can pass such an agenda with a majority of two people that are with you only because you promised them minor government job. No way.

POGGIOLI: Over the last year, Berlusconi has become more and more the object of derision, both at home and abroad. He has been plagued by judicial woes. He currently is facing three trials of corruption, tax fraud, and paying for sex with a minor. Last week, Berlusconi irritated his E.U. partners, and triggered more market turmoil, with his dismissive comment on the single currency.

JAMES WALSTON: (Through Translator) The euro is a strange currency, which has convinced no one because it belongs to more than one country, but does not have a bank of reference and guarantees.

POGGIOLI: Remarks like that do not help Berlusconi's international standing. In fact, German Chancellor Merkel has started to consult directly with Italy's chief of state, Giorgio Napolitano, to seek reassurances on Italy's determination to lower its debt through structural reforms and budget cutting.

While the president does not have the power to fire the prime minister, this week, in an unusual move, Napolitano began political consultations to determine how much support Berlusconi really has in Parliament. One of the politicians consulted was centrist opposition leader Pierferdiando Casini, who said that as long as Berlusconi stays in power, all sacrifices are useless.

PIERFERDIANDO CASINI: (Through Translator) Let's face facts. There is the prime minister's lack of credibility, and the economic crisis of a country that's not growing and has to make sacrifices to get back on track. We assured chief of state Napolitano that we're willing to try to solve both problems.

POGGIOLI: Casini has joined forces with the large leftist opposition in proposing an emergency government, possibly headed by a prestigious technocrat. But as James Walston, professor of political science at Rome's American University, points out, the only way Berlusconi can be ousted from power is if he is loses the support of his own M.P.s.

WALSTON: If enough people in Parliament say, we've had a enough, Silvio; please step down because otherwise the country will go down, then he will be forced to do so - but not until then.

POGGIOLI: And just last night, reports circulated that six lawmakers from Berlusconi's party have asked the prime minister to act as a real statesman and for the good of the country, resign from office.

Sylvia Poggioli, NPR News, Rome.

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