Italy's Renzi promises to pursue reform drive despite obstacles

Reuters News
Posted: Aug 25, 2015 12:08 PM

By Paolo Biondi

RIMINI, Italy (Reuters) - Prime Minister Matteo Renzi vowed on Tuesday to forge ahead with his reform program despite growing opposition within parliament, saying Italy had to break free of 20 years of inertia and bickering.

Emerging after the summer break, Renzi dismissed suggestions he might have to hold early elections given the fractured political landscape and promised to deliver on sweeping tax cuts over the next three years.

"While the world moved forward, we became blocked, trapped in sterile internal debates," the 40-year-old prime minister told a conference in the Adriatic resort of Rimini.

"Italy can play a role in a changing Europe provided it itself changes," he said.

Renzi came to power in February 2014 after winning a power struggle within his center-left Democratic Party (PD), and has pushed a battery of reforms into law, including ones aimed at reviving the jobs market and boosting the education system.

However, his frenetic activity has yet to pay great dividends, with a long-awaited economic recovery already losing steam, and his own approval rating down some 35 percentage points this past year.

He also faces an increasingly tough time trying to cobble together a viable majority in the splintered, upper house Senate, meaning his ambitious constitutional reform package -- designed to make it easier for governments to rule -- could yet fall apart this autumn.

But Renzi struck a defiant tone, even as he battles doubters within his own party over his drive to limit the future role of the Senate by cutting the number of senators, who would no longer be elected by voters, and giving the lower house the final say in approving laws.

"We need to create political decision makers. It isn't by multiplying posts that you multiply democracy," he said.

He also dismissed critics, who have questioned where he will find some 35 billion euros ($39.9 billion) needed to cover a raft of recently announced tax cuts from 2016 to 2018, saying taxes were "exaggerated" and had to come down to enable Italian firms to compete against their European peers.

Successive Italian governments have repeatedly tried, and largely failed, to shake up the country's hidebound bureaucracy and revitalize an economy that has not grown since 2000.

(Writing by Crispian Balmer; Editing by Jan Lopatka)