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Renzi presents economic blueprint

Premier vows to press on with overhaul of political system

08 April, 20:26
Renzi presents economic blueprint (By Paul Virgo) (ANSA) - Rome, April 8 - Premier Matteo Renzi presented the government's economic blueprint for the next three years on Tuesday after his cabinet approved the plan and pledged to beat resistance to his drive to overhaul Italy's slow, expensive political system. The Economic and Financial Document (DEF) features the executive's macroeconomic forecasts and its plans to boost Italy's weak recovery after the country emerged from its longest postwar recession last year. These plans include Renzi's pledge to pass 10 billion euros in income tax cuts targeting lower earners.

He said this would mean an extra 80 euros a month for those workers, the equivalent to an extra pay packet during the course of the year. The tax cuts will be delivered via a decree that the cabinet will approve on April 18, he said.

The document, which needs to be approved by parliament quickly so it can be delivered to the European Union by the end of the month, forecasts that the Italian economy will grow 0.8% in this year. That is higher than the European Commission's prediction of 0.6%, but less optimistic than the 1% of the last forecast of the administration of Enrico Letta - Renzi's colleague in the centre-left Democratic Party, whom he unseated in February.

The blueprint put Italy's deficit-to-GDP ratio at 2.6% this year, under the EU threshold of 3%.

It also confirmed the government's plans to set a cap on the earnings of public-sector managers to the 238,000-euro annual salary of President Giorgio Napolitano. Renzi also confirmed that he is forging ahead with reforms to make Italy easier and cheaper to govern, including the transformation of the Senate into a leaner assembly of local-government representatives with blunted law-making powers.

Ex-premier Silvio Berlusconi, the leader of the opposition centre-right Forza Italia (FI) party, has expressed doubts about a Constitutional reform bill presented by the government and hinted he may go back on an agreement to back the reforms.

There have also been calls from within the PD for an alternative reform, which would see the number of Italian parliamentarians halved, but retain the Senate as a elected assembly.

Renzi reiterated that he intended to have the first reading of the reform bill - which will also complete the elimination of Italy's provincial councils and return some powers to central government from the frequently overspending regional administrations - before European elections on May 25. "We respect everyone and we'll talk in even more detail about the reform of the Senate," Renzi told a press conference.

"But you can't start the debate again from scratch".