Italian PM drops contested electoral reform

Prime Minister Silvio Berlusconi yesterday dropped ambitious plans to rewrite Italy's electoral system, but insisted his centre-right government was on track to reform the highly bureaucratic state.

Speaking at an end-of-year news conference, Mr Berlusconi said 2005 would mark a turning point for Italy's sluggish economy and promised fresh tax cuts and investments in infrastructure.

Since taking power in 2001, the government has pushed through numerous reforms, including changes to labour rules, state pensions and the education system.

The prime minister said more reforms would be hurried through parliament in the first three months of next year, including moves to simplify voting laws. However, he said plans to return to proportional representation had been dropped.

"Today I don't think we have the necessary conditions to approve a profound change to the system and return to proportional representation," he said, blaming the opposition for the impasse.

At present, Italy operates a confusing, two-tiered voting system, with 75 per cent of parliamentarians elected via a "first past the post" vote and the remainder elected via proportional representation based on party lists.

The prime minister's Forza Italia (Go Italy) party had pressed for a return to pure proportional representation - a move experts said would improve his chances of retaining power in a general election due in 2006.

The new reform will consist primarily of putting the two voting systems together on the same ballot paper and doing away with the two voting slips presently employed.

The billionaire media-mogul has often compared his reform drive to that of former British Prime Minister Margaret Thatcher and yesterday he said he was outpacing her efforts.

"(Thatcher) told me that you need your first mandate to understand what's going on and then a second mandate to make the reforms. I must say that we are moving faster than Mrs Thatcher," he said, with a broad smile.

However, he said that some of his government reforms had not gone far enough, including the pensions shake-up, and denounced a recent conflict-of-interest law as "absurd and useless".

The law forced the prime minister earlier this week to stand down as chairman of AC Milan soccer club after 18 years in charge. Mr Berlusconi told reporters his supporters were drawing up a change to the law which would enable him to take back the job.

He also lashed out at the centre-left, denouncing the opposition as "anti-Italian" for blocking some of his reforms.

His comments drew immediate opposition ire: "We are facing a democratic emergency," said Alfonso Pecoraro Scanio, head of the Greens party. "We cannot let Berlusconi lead Italy as though it were the Titanic. The alarm bells are ringing."

The 68-year-old Mr Berlusconi indicated that he would head the centre-right ticket in the 2006 elections, but suggested that he might also become Italy's next president - a largely ceremonial position that becomes free in 2007.