Berlusconi party vows to stick to Italy budget goals

By Ilaria Polleschi

MILAN, June 6 (Reuters) – Italian Prime Minister Silvio Berlusconi’s centre-right coalition will stick to a commitment to bring its budget into balance by 2014, the newly named coordinator of the ruling PDL party said on Monday.

Speaking to reporters after a meeting between Berlusconi and the head of his Northern League coalition partners Umberto Bossi, PDL secretary Angelino Alfano said the government would carry on to the end of its term in 2013.

He ruled out softening its deficit-cutting stance following signs of tension in the cabinet over the hardline stance of Economy Minister Giulio Tremonti, who has irritated some colleagues by rigidly insisting on tight spending controls.

“We have reconfirmed our objective of balancing the budget by 2014 and the fact that everything will be done in the time limits we have foreseen and on the basis of the constraints the EU imposes on us,” he said.

Alfano, appointed to strengthen the PDL leadership following the centre right’s crushing losses in local elections last month, brushed off talk of disagreements with the Northern League.

“What’s important politically is that the determination to carry on and complete this term is reinforced,” he said.

“The relationship between the League and the PDL, between Berlusconi and Bossi is solid and will give this country a solid majority government able to ensure stability and carry out reforms,” he said.

Italy’s public debt is one of the highest in the world at 120 percent of gross domestic product, but its relatively modest deficit, conservative banking system and high private savings have saved it from the turmoil sweeping countries like Greece.

However the uncertainty after the local elections and disagreement in the government over the impact of tight spending controls has raised speculation that Berlusconi may be tempted to loosen the purse strings ahead of the 2013 elections.

On Sunday, Culture Minister Giancarlo Galan, a close ally of the prime minister, criticised Tremonti’s insistence on budget rigour and said more needed to be done to stimulate growth.

Already hit by a series of corruption and fraud trials and accusations that he paid for sex with an underage prostitute, Berlusconi suffered a severe blow in the local elections which saw a string of cities, including the financial capital Milan, won by the opposition.

A referendum on June 12-13 over plans to relaunch the nuclear power sector is expected to provide the next major test of government popularity.