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Berlusconi becomes Italian leader for third time

ROME (Reuters) - Silvio Berlusconi was sworn in as prime minister of Italy on Thursday for the third time in his political career after forming one of Italy’s most right-wing cabinets since World War Two.

Italy's incoming Prime Minister Silvio Berlusconi arrives to speak to reporters after consultations with Italy's President Giorgio Napolitano at Quirinale palace in Rome May 7, 2008. Berlusconi put the finishing touches to his cabinet line-up on Wednesday before being sworn in later this week as the head of what could be Italy's most right-wing government since World War Two. REUTERS/Tony Gentile

The 71-year-old media tycoon, who won last month’s parliamentary election, took his oath of allegiance at the presidential palace along with government ministers whose main challenge will be to revive an economy at risk of recession.

Although Berlusconi has warned Italy it faces tough years ahead and he will have to carry out unpopular reforms, he spoke optimistically before his inauguration.

“We’re in a honeymoon period,” Berlusconi said, adding he intended to pick up from where he left off in 2006, when he narrowly failed to be re-elected after a five-year term. He also served briefly as prime minister from 1994 to 1995.

“We have 100 days to avoid disappointing those who put their faith in us, and five years to change and modernize this country,” he was quoted as saying by the newspaper La Stampa.

Berlusconi promises to fight crime, crack down on illegal immigration and clear the mounds of rubbish in Naples that have paralyzed the southern city.

He aims to hold his first full cabinet meeting in Naples, saying the rubbish crisis is a national problem because it has stained Italy’s image abroad.

Another headache will be to rescue the state-controlled airline Alitalia from possible bankruptcy by finding a buyer with deep pockets.

The International Monetary Fund, which sees the Italian economy growing at just 0.3 percent this year, said Berlusconi’s promised tax cuts should be aimed at stimulating demand and that he must ensure they are paid for by spending cuts.

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“Any tax cuts need to be at least fully by expenditure reduction, given the pressing need for fiscal consolidation,” the IMF’s External Relations Director Masood Ahmed said.

RIGHT-WING ALLIES

His cabinet is stacked with right-wing allies from the National Alliance (AN), a party with fascist roots, and the strongly anti-immigrant Northern League -- a combination that augurs a tougher immigration policy and a hard line on security.

Among them is Roberto Calderoli, a Northern League maverick known for anti-Islamic rhetoric, once blamed for provoking riots in Libya by wearing a T-shirt featuring a Danish cartoon of the Prophet Mohammad.

A charity in Libya chaired by leader Muammar Gaddafi’s son warned of “catastrophic repercussions” if he had a cabinet post.

The cabinet is dominated by Berlusconi loyalists which should enable him to impose his policy ideas.

“He has created a government in his own vision and likeness, and this is a huge opportunity and responsibility,” said Massimo Franco in a column in the newspaper Corriere della Sera.

One of Berlusconi’s most trusted advisers, Giulio Tremonti, returns for a third spell as economy minister with the daunting task of mending the economy, cutting the budget deficit and overseeing an ambitious overhaul of the tax system.

New Welfare Minister Maurizio Sacconi, who like Tremonti is from Berlusconi’s Forza Italia party, said his priority would be to improve the purchasing power of workers affected by increases in the price of basic foods such as bread and pasta.

“We must address this emergency together along with economic and social troubles,” Sacconi told the newspaper Il Giornale, which is owned by Berlusconi’s brother.

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