Monti warns he may withdraw support for Italian government

Reuters News
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Posted: Jul 01, 2013 8:15 AM
Monti warns he may withdraw support for Italian government

ROME (Reuters) - Former Italian Prime Minister Mario Monti has warned he may withdraw support for the coalition government of Enrico Letta if it cannot resolve disagreements between its main partners and push ahead with economic reforms to tackle a deep recession.

Monti's Civic Choice alliance has too few seats in parliament to bring down the government, but his warning is a sign of growing concern at the slow pace of reform because of disagreements between the center-left and center-right parties which are the main planks of Letta's coalition.

"Without a change in direction, we do not think that in the long-term we will be able to support a government impacted by growing ambiguities," Monti wrote on his Facebook page.

Monti, who introduced pension and labor reform, spending cuts and tax hikes while head of a year-long technocrat government that came to power at the height of a financial crisis in November 2011, said Letta had started well since taking over in April.

But he said the government needed to overcome differences between and within the coalition parties so it could push on with radical reforms to boost growth and make Italy more competitive. Italy is deep in its longest recession since World War Two, with unemployment at record levels.

He urged Letta to draw up a coalition contract to ensure those reforms were carried out regardless of uncertainties within the two major parties.

Letta's center-left Democratic Party (PD) will elect a new leader in the autumn and the center-right People of Freedom (PDL) party faces uncertainty due to the mounting legal woes of its leader Silvio Berlusconi. He was convicted last week on charges of paying for sex with a minor and abuse of power.

The PD and PDL are already at odds over the center-right's demand for the scrapping of a housing tax introduced by Monti, despite strained public finances and the need to keep within European Union borrowing limits.

Monti was brought down by Berlusconi's PDL last December, precipitating an election in February that was followed by a long political paralysis finally overcome in April when Letta took power at the head of an uncomfortable left-right coalition.

(Reporting By Catherine Hornby; editing by Barry Moody and Jon Boyle)