Italian Prime Minister Romano Prodi has called a strategy meeting for Saturday to get his fractious coalition into line behind his unpopular 2007 budget plan to try to ensure a smooth passage of the bill through Parliament.
Prof. Prodi said that he would summon party chiefs and ministers to discuss the budget, which he said was the best way to "get Italy to believe in itself once more and return to growth" after the country's debt downgrade last week.
The budget, including €15 billion of measures to cut Italy's deficit in line with European Union rules, should begin to be scrutinised in the lower house budget committee this week, the start of a process that could last until year-end.
Economy Minister Tommaso Padoa-Schioppa was due to meet Bank of Italy Governor Mario Draghi and European Monetary Affairs Commissioner Joaquin Almunia who has said he will be "extremely attentive" to changes to the 2007 budget.
The budget Bill must be approved by both houses of Parliament by the end of December.
But with savings measures watered down before even getting to Parliament due to pressure from leftists in the coalition, unions and local authorities, Prof. Prodi has threatened a confidence vote to avoid more amendments on key tax reforms.
He said the head of the eight parties in his coalition of Catholic centrists to communists, plus ministers and the heads of the upper and lower house budget committees, would work together on a strategy for the parliamentary debate.
"We will work together to get the budget approved as quickly as possible," said Prof. Prodi. The meeting will also decide if a confidence vote - which would be the eighth called by Prof. Prodi in just six months in office - can be avoided or not, he said.
Two ratings agencies downgraded Italian government debt last week, citing the government's failure to cut spending and pass structural reforms to Italy's low-growth economy.
The agencies also doubted the government's ability to bring the deficit under three per cent of gross domestic product next year, from 4.8 per cent expected for 2006.
Prof. Prodi rules with a majority of only one seat in the Senate, leaving him vulnerable to the demands of leftist coalition partners.
One outspoken centrist minister, Antonio Di Pietro, who has the infrastructure portfolio, called for an urgent meeting "to relaunch the spirit of the coalition" amid talk that some of the allies are plotting against Prof. Prodi.
"If we break up this coalition we will have to hold new elections," said Mr Di Pietro.
With his popularity falling in opinion polls, Prof. Prodi blames the downgrade on overspending by his predecessor, conservative leader Silvio Berlusconi, who is trying to whip up discontent among higher income earners hit by tax hikes in the 2007 budget.