Italy's Renzi pledges to slash red tape, 'revolutionize' economy

Reuters News
Posted: Feb 25, 2014 1:31 PM

By Gavin Jones

ROME (Reuters) - Italian Prime Minister Matteo Renzi pledged on Tuesday to slash red tape and "revolutionize" the economy, ahead of a lower house vote of confidence to fully empower his new government.

"Italy's finest page has yet to be written," Renzi said a his maiden speech to the Chamber of Deputies which produced many of his trademark rhetorical flourishes but few specific policy commitments.

The 39-year-old Renzi, Italy's youngest prime minister, said radical steps were needed to revive an economy that has barely grown for the past 15 years and restore citizens' confidence in politics.

He promised to overhaul the tax system by "a gigantic operation of simplification", and to cut unemployment well above 12 percent with "the courage to revolutionize the economic and legal system of our country".

Renzi delivered his unwritten 50 minute speech in the usual colloquial style which differs sharply from his predecessors and from Italian tradition, but it was greeted coolly by the chamber, with little applause even from his parliamentary majority.

Deputies from the anti-establishment 5-Star Movement sent out tweets during the speech saying it was devoid of substance.

The outgoing mayor of Florence and leader of the center-left Democratic Party (PD) ousted his predecessor as prime minister Enrico Letta this month by withdrawing the PD's support from his government.

Renzi is expected to win Tuesday's vote easily with the backing of the PD and smaller center-right and centrist groups, having won his first confidence vote in the upper house Senate on Monday.

His speech was similar in style and substance to the one he gave to the Senate but he spelled out that a promised "double digit" reduction in labor taxes this year meant a cut of 10 billion euros, rather than 10 percent as had been widely interpreted and would have meant around a 30 billion euro cut.

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He also devoted more attention to the European Union, saying Italy's 6-month presidency of the region from July was "a gigantic opportunity" to establish a greater role for the country in shaping EU policy.

However, he shed no light on whether he would push for Italy to be given leeway to allow its budget deficit to exceed the EU's 3 percent of output ceiling, as he had suggested on several occasions prior to becoming prime minister.

"Europe today doesn't give us hope because we have allowed the debate to be dominated by decimal points and percentages," he said.

"We want a Europe where Italy doesn't just go and receive instructions but gives a fundamental contribution, because there can be no Europe without Italy."

(Editing by Alison Williams)