Italy's Berlusconi to target economy and crime

By Stephen Brown

ROME (Reuters) - Italy's Silvio Berlusconi pledged on Tuesday to use his big election win to push through economic reforms, and vowed to close the border to illegal immigrants in a crackdown on criminals he called "the army of evil".

The 71-year-old conservative secured a third term as prime minister but owed his majority in parliament to the support of the xenophobic Northern League, which won 8 percent of votes.

In comments likely to be applauded by the League, he promised tough measures against crime, blamed by many Italians on illegal immigrants, as well as an Italian rescue for Alitalia airline and an end to a garbage crisis in Naples.

"One of the first things to do is to close the frontiers and set up more camps to identify foreign citizens who don't have jobs and are forced into a life of crime," Berlusconi said.

"Secondly we need more local police constituting an 'army of good' in the piazzas and streets to come between Italian people and the army of evil," he said in a television interview.

A staunch ally of Washington in its "war on terrorism" when he was last in power, Berlusconi had a call from President George W. Bush congratulating him on Sunday and Monday's vote.

"The president looks forward to working with him again," said White House spokeswoman Dana Perino.

Berlusconi said he had received similar calls from the leaders of Germany, France, Britain and Spain and Russia's Vladimir Putin, who will visit him in Sardinia later this week.

Famous for once making a two-fingered sign behind a Spanish minister's head at a photo call, Italy's prime minister-elect told a news conference he would now be "the oldest -- sorry, I mean the wisest" at European summits.

But credit ratings agencies were wary of Berlusconi, whose last government in 2001-2006 saw a reversal of a long-running decline in Italy's public debt, the third highest in the world.

Standard & Poor's said he had a "sufficiently robust mandate" to tame spending and raise productivity, but his willingness to liberalize the economy and cut debt was "questionable".

Fitch said Berlusconi's promised tax cuts must be matched by lower spending, while any repeat of his last government's tax evasion amnesties would be "a retrograde step".

BLACKMAILING OVER

Although many Italians are disillusioned with politics and doubt any government can quickly cure the ills of the European Union's fourth-largest economy, Berlusconi's strong position would help him to push reforms through parliament.

"This framework is good news: the blackmailing power of smaller parties has been drastically reduced, and Italy is now more aligned to the experience of several other European countries," said UniCredit bank economist Marco Valli.