Italian Prime Minister Mario Monti sparred with Silvio Berlusconi yesterday over the need for austerity, as local media reported the economics professor was preparing to take on the colourful billionaire in a looming election campaign.

“We are really only just beginning,” Monti said in a speech at a Fiat car factory in southern Italy, in which he defended the “bitter medicine” of the budget discipline he has implemented and warned against any attempt to turn back the clock.

“Italy had a high temperature and we could not cure it with a simple aspirin. We needed a bitter medicine that was not easy to digest but that was absolutely necessary to go in deep and completely cure the illness,” said the former EU commissioner.

“I think it would be irresponsible to waste all the sacrifices that Italians made,” he said in an apparent reference to recent campaign talk from Berlusconi, who has promised to put an end to austerity and abolish a new property tax.

“This could plunge Italians back into a state of nirvana, far from reality,” Monti said at the event, which announced the launch of two new Fiat models at a plant that has been hit hard by plunging sales.

“What is happening here is not magic but a symbol of a turnaround that is possible also for Italy. That is what I want for this country!

“Today, in Melfi, we are starting an operation that is not for the weak of heart but we know that an Italy that is strong of heart can emerge,” he said.

In a radio interview, his predecessor Berlusconi warned Monti against joining the campaign and condemned his economic policies.

“I do not think it is in Monti’s interests to become a small player in politics along with other small players.”

Berlusconi, 76, said Monti’s policies should be “completely changed”, adding “the politics of austerity leads to recession.”

Meanwhile, the Senate voted a budget for next year that will now go before the lower house for final approval, expected today at 7pm.

Monti, 69, has said he will resign and open the election campaign as soon as the vote is passed, although he will stay on in a caretaker capacity until elections.

Monti is to hold a press conference and declare his intentions on Saturday or Sunday.

The most likely date for the vote is February 24.

Media reports said Monti will take part in the campaign as unofficial leader of a centrist coalition that some observers likened to the Christian-Democrats who dominated Italy for decades.

While Monti’s name cannot be on the ballot as he is already a senator-for-life, he can still be appointed to a post in Government, including Prime Minister.

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