* Confindustria chief says government not helping recovery
* Threatens to appeal to president Napolitano
* PM Letta looks isolated in face of attacks from all sides
* Accuses Confindustria's Squinzi of being a "doom-monger"
By Valentina Consiglio
ROME, Feb 6 The head of Italy's main business
lobby on Thursday accused Enrico Letta's government of failing
to help the economy and threatened to appeal directly to the
head of state unless Letta sets out specific reforms this month.
The economy, the euro zone's third largest, is struggling to
emerge from its longest post-war recession. Confindustria has
called, largely in vain, for Letta's fragile left-right
coalition to cut public spending and ease taxation and labour
Relations have soured steadily since the 2014 budget
presented last autumn fell far short of Confindustria's requests
for a decisive cut in labour taxes.
This week Letta accused Confindustria president Giorgio
Squinzi of being a "doom-monger" after Confindustria said the
government was too upbeat in its forecasts for a firm and
sustained economic recovery this year.
"Rather than being a doom-monger, I would say I am a
realist," Squinzi said in a radio interview on Thursday with
state broadcaster RAI.
The government forecasts economic growth of 1.1 percent this
year, while Confindustria expects just 0.6-0.7 percent, much
closer to the projections of virtually all independent
Squinzi, who met Letta on Wednesday to try to ease tensions,
said he had set out the employers' priorities, requiring "very
rapid action", and he hoped Letta would meet them when he
attends a Confindustria assembly on Feb. 19.
If he failed to do so, "we will have no option but to appeal
to (President Giorgio) Napolitano", said Squinzi.
He did not spell out what he would ask Napolitano to do, but
the president is the only figure who could dissolve parliament
and call fresh elections.
Squinzi said Letta's "inertia" was not entirely his own
fault, but "is also the product of a very confused political and
With parliament preparing to debate proposals to change
electoral rules blamed for chronic political instability,
furious rows between the parties, sometimes bordering on
physical fights, have poisoned the political atmosphere.
Letta has appeared isolated in the face of criticism from
Confindustria, from the centre-right opposition and also from
Matteo Renzi, the leader of Letta's own Democratic Party, which
is the mainstay of the ruling coalition.
An editorial on Wednesday in the Confindustria-owned
business daily Il Sole 24 Ore attacked the government for doing
virtually nothing to revive domestic demand, create jobs or
encourage stagnant investments.
The government has accused Confindustria of ingratitude for
its efforts to pay off some 40 billion euros ($54 billion) of
arrears in bills owed by the public sector to businesses, but
the European Union this week said Italy was still failing to pay
new bills in an acceptable time frame of 30 to 60 days
Italian media have run unsourced reports that Letta is
considering resigning and seeking a fresh mandate from
Napolitano at the head of a re-shuffled cabinet team.
Some reports have speculated early elections could be held
in May or that Letta could even be replaced by Renzi as prime
minister in a coalition deal without returning to the polls.
($1 = 0.7390 euros)
(Writing by Gavin Jones; Editing by Ruth Pitchford)