UPDATE 2-Italy president says next government must bring reforms

Mon Dec 17, 2012 4:32pm EST

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ROME Dec 17 (Reuters) - Whichever party wins Italy's next election must make wide-ranging reforms after opportunities were wasted during the turbulent legislative period now drawing to an end, Italian President Giorgio Napolitano said on Monday.

"Five years is enough time for the next government" to undertake a series of needed reforms "during a season of budget rigour," Napolitano said during an address to the highest institutional figures, including Prime Minister Mario Monti.

Napolitano said he was "bitter and worried" that Italy's political parties had not learned to compromise in the interest of the country even after 13 months of the technocrat Monti government and that he expected each one to outline credible programmes ahead of the election.

He said parliament's failure to reform an unpopular electoral law was "unforgivably serious". Lawmakers had been arguing for months over the law, which allows party leaders to hand-pick members of parliament

Monti has said he will resign once Italy passes the 2013 budget law -- expected by the end of this week -- and his government will stay on in a caretaker capacity until the national vote, which will probably be held in February.

The former European Commissioner is under international pressure to stand in the election so he can continue his policy agenda which has so far included an overhaul of the pension system, deregulation and labour market reform.

But a poll by the SWG institute on Monday showed that 61 percent of Italians are against Monti running for a second term, with approval ratings sinking to almost their lowest level since he came to power.

Napolitano said it was important that the next government helped maintain stability and continuity by keeping Italy on the reform path pursued by Monti, which is aimed at defusing a debt crisis that threatens the euro zone.

Silvio Berlusconi, who is seeking his fifth term as prime minister, reaffirmed on Monday that he would reverse some of Monti's policies if he wins the elections, and would eliminate an unpopular housing tax as one of his first steps.

"We are in a very serious situation, because of the austerity regime that has been imposed on Mediterranean countries by Europe, where Germany played the role of hegemonist," he told his own Rete 4 television channel.

"We have had too many taxes, too many tax increases. We have to get the economy going again, and to do that we need to reduce the tax burden on businesses," he said.

Berlusconi's centre-right People of Freedom party has about 16.5 percent of electoral support, SWG's poll showed, compared to 31 percent for the centre-left Democratic Party and 19 percent for the populist 5-Star Movement.

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