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Italy's Monti seeks political unity amid market turmoil
ROME (Reuters) - Italian Prime Minister Mario Monti on Wednesday sought to shore up his political support ahead of a series of crucial international meetings where stemming the spread of the euro zone crisis will be the main objective.
"We should use these new difficulties to double our efforts both on the European front and within Italian politics," Monti said in a speech to parliament.
Monti's political backing has been increasingly shaky with some lawmakers calling for early elections as his popularity slumped to its lowest level since taking power.
Monti was hugely popular when he took over from Silvio Berlusconi in November to head off a Greek-style default, but his tax-laden austerity package has eroded his appeal.
Now his right-left coalition is growing increasingly worried that supporting the government is hurting their prospects in next year's national election just as it did at last month's local polls.
Monti met the leaders of the parties in his coalition late on Tuesday, urging them to give his government unqualified support "to overcome the current critical situation and give an image of unity abroad," a statement read.
Monti, who also lamented last week he had lost the backing of Italy's establishment, has a busy schedule of economic diplomacy ahead of him.
He meets German Finance Minister Wolfgang Schaeuble on Wednesday, new French President Francois Hollande on Thursday, and then heads to the G20 in Mexico on June 18-19, the weekend after the Greek election.
Monti is hosting a meeting with Germany, France and Spain in Rome on June 22 to set the stage for a June 28-29 EU summit that is supposed to map out the future of the euro zone.
Party leaders on Wednesday renewed their backing for the Monti government, and said they would work together on a joint parliamentary motion to support the prime minister before the EU summit.
The coalition also overwhelmingly showed its confidence in the government in the first of three such votes to be held on Wednesday to accelerate the passage of an anti-corruption bill.
But Monti's ability to make far-reaching reforms continued to appear much more limited that it was seven months ago.
His labor market reform was first watered down under pressure from the centre-left Democratic Party (PD) and labor unions, and later more changes were made at the request of former Prime Minister Silvio Berlusconi's People of Liberty (PDL) bloc.
Presented three months ago, the labor reform has yet to be passed by parliament.
Now a series of spending cuts to the public administration, worth as much as 5 billion euros per year, is struggling to see the light of day.
And political parties continued to pressure Monti to soften his stance on budget rigor.
On Wednesday, after Monti said his government was on track to meet its budget goals, PD leader Pier Luigi Bersani said Italy should consider pushing back its structural balanced budget target, currently set for next year.
PDL secretary Angelino Alfano said his party will continue to support Monti's government as long as the tells German Chancellor Angela Merkel that "the Italian parliament could have a negative reaction" if she does not accept more growth policies in place of rigor.
So when Monti emphasized the need for a "credible" growth plan including "serious" infrastructure investments at the next EU summit, his comments seemed more aimed at his domestic partners than his European ones.
(Additional reporting by Daniele Mari and Gavin Jones; Editing by Jon Hemming)
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