ITALY: ROMANO PRODI'S GOVERNMENT WIN CRUCIAL VOTE OF CONFIDENCE

(16 Oct 1997) Natural Sound

Italian Prime Minister, Romano Prodi's government won a crucial vote of confidence on Thursday.

It now has the support it needs to push on with its drive to join the single European currency.

The vote ends a turbulent week in Italian politics, which saw Prodi temporarily stand down as Prime Minister seven days ago.

The 319-285 vote in the Chamber of Deputies, the lower house of parliament, confirmed the support of hard-line Communists.

Prodi needs their votes for a majority in the lower House, and submitted his resignation last week after they split from his bloc by refusing to support his deficit slashing budget.

The spending cuts are said to be vital if Italy is to continue its progress toward meeting the strict economic criteria for joining the single European currency.

But the Communists refused to sign up on the grounds that the nearly 3 (b) billion dollars of cuts would come mostly from pensions and other social benefits.

Prodi and the Communists subsequently did a deal.

But Prodi insisted on Thursday that his coalition had not shifted further to the left to appease the Communists.

Critics, especially the business sector, say Prodi conceded too much to the Communists.

In particular, they are worried about Prodi's promise to cut the work weeking to 35 hours.

Italy's association of industrialists has predicted an increase in costs and a drop in productivity.

Communist Refoundation's leader, Fausto Bertinotti, speaking to the Chamber of Deputies, said the industrialists were selfish and arrogant.

With Prodi apparently firmly back at the helm, the premier urged lawmakers to quickly approve the 1998 budget.

The government is hoping that the budget will ensure its entry into European monetary union in two years.

Without it, the European Commission in Brussels warned on Tuesday, that Italy's budget deficit would balloon to 3.7 per cent of G-D-P by 1998.

This would be above the 3 per cent ceiling demanded by the Maastricht Treaty for joining the single currency.

Prodi still faces a vote of confidence in the Senate or upper house, which is expected to start at 1830 GMT.

However the result is foregone conclusion as his centre-left grouping enjoys a comfortable majority there.

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