Italy PM summons coalition partners as tensions rise
ROME (Reuters) - Italian Prime Minister Enrico Letta called a government meeting after a coalition partner threatened to withdraw support on Monday, citing frustration with a slow pace of reforms to tackle a deep recession.
"Italian politics has its problems. On Thursday we will have a 'control room' meeting and I'm sure we will resolve these problems," Letta told reporters in Israel after the leader of the centrist Civic Choice group Mario Monti warned he could withdraw from the coalition.
Civic Choice has too few seats in parliament to bring down the government but the threat from Letta's predecessor as prime minister is a sign of growing concern at the slow pace of reform caused by divisions in Letta's unwieldy left-right 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.
In response, Letta said he would meet leaders of the different parties in the coalition and of parliamentary groups on Thursday to resolve the differences and forge a path forward.
Letta's centre-left Democratic Party (PD) will elect a new leader in the autumn and the centre-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 centre-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.
DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.