Italy cabinet meets amid division over pensions

Mon Oct 24, 2011 9:32am EDT
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By James Mackenzie

ROME (Reuters) - Italian Prime Minister Silvio Berlusconi summoned his cabinet for an emergency meeting on Monday to seek ways to overcome opposition from coalition allies to demands from European partners for swift economic reforms.

Following explicit calls for action at the weekend from German Chancellor Angela Merkel and French President Nicolas Sarkozy, Berlusconi is due to propose reforms to the pension system that have so far been resisted by his allies in the Northern League.

Monday, parliamentary group leader Marco Reguzzoni repeated that the League was firmly against pension reforms, including raising the retirement age to 67 from 65, a step urged by institutions including the Bank of Italy.

"The League has always been against any pension reforms," Reguzzoni told Italian television. "We've made alternative proposals which we will discuss in cabinet."

Ministers are due to meet at 1600 GMT.

EU leaders have become increasingly exasperated at the government's erratic response to the crisis, which could threaten the entire euro zone if Italy does not shore up its finances and regain the confidence of financial markets.

Italian newspapers commented bitterly on the wry smiles exchanged between Merkel and Sarkozy when they were asked about Berlusconi during a news conference Sunday at which they demanded Rome act more quickly.

"It was not nice, for an Italian, to be present yesterday at the news conference in Brussels held jointly by Merkel and Sarkozy," the daily Corriere della Sera said in an editorial.   Continued...