Italian unions plan second strike over pension reform

Italy's three largest union will stage another general strike, probably on March 26, to protest against the government's planned reform of the pensions system, a labour leader said yesterday.

It will be the fourth industrial storm Prime Minister Silvio Berlusconi has had to weather since sweeping to power in 2001-and his second showdown with the unions and their 11 million members over his plans to make Italians retire later.

Berlusconi, conscious of a public losing faith in the Italian economy and depressed by corporate scandals, tried last month to avert more morale-sapping industrial action, by watering down the pension reform.

The latest proposal would raise the retirement age by three years to 60 from 2008, but would shy away from forcing people to pay into the system for longer than the current 35 years.

It was much softer than deficit-busting proposals trumpeted in October to make men work until they were 65 years old or had made 40 years of contributions.

But the unions - who staged a half-day strike last year over the first draft - are still on the warpath.

"We are heading for a general strike, most probably on the last Friday of this month," Luigi Angeletti, head of the UIL union, told a conference. He did not say whether the strike would last for the full working day.

On the Mediterranean island of Sicily, the leader of thebiggest union CGIL, Guglielmo Epifani, also promised a fight.

"It's not a strike just for the sake of it ... if we don't change course, the country will not come out of its decline and will pay a hefty price," he said.

Berlusconi is keen to prove he can make structural reforms, under pressure from the European Union and with the threat of a ratings downgrade from credit agency Standard & Poor's hanging over his head.

The government is trying to hurry the pensions bill through parliament, provoking outcry from the centre-left opposition. The draft law goes to the Senate next Tuesday - earlier than expected and coinciding with Economy Minister Giulio Tremonti's trip to Brussels for a meeting of euro zone finance chiefs.

Italy's heavily-indebted pensions system currently swallows about 15 per cent of GDP and the proportion is likely to grow as the country's birth rate falls and people live longer.

The government says its reform will bring annual savings of 0.7 per cent of gross domestic product, although industry chiefs and many private economists think the plan is too tame.