Prodi vows to pull troops out of Iraq

New Italian Premier Romano Prodi outlined his centre-left government’s programme today.

He vowed to bring home Italian troops in Iraq and deliver shock therapy to fix the country’s struggling economy and poor ethics.

Prodi, addressing the Senate a day before a vote of confidence on his government, presented a platform that promises to reverse years of policies of his conservative predecessor, Silvio Berlusconi, both in domestic and international affairs.

“We consider the war and occupation in Iraq a grave error that hasn’t solved - in fact, has complicated – the problem of security,” Prodi told politicians.

“It is therefore the intention of this government to propose to Parliament a pullout of our troops,” said Prodi, drawing boos from the conservatives.

Prodi did not give a timetable for the withdrawal of the remaining 2,600 Italian troops, which were sent in by Berlusconi after the ouster of Saddam Hussein in 2003 to help rebuild the country.

But parliament must vote on the financing of the mission by the end of June.

The senate speech was the first since Prodi took office yesterday, when he submitted his cabinet list to President Giorgio Napolitano and was sworn in along with his ministers.

The changeover ended Berlusconi’s conservative rule after five years.

Prodi’s government will face a vote of confidence in the senate – where his coalition has a mere two-seat majority – tomorrow, and another one in the lower house on Tuesday.

If it loses any of the votes, the government must resign.

The toughest challenge facing the government is reviving the country’s zero-growth economy, a task that Prodi said required “an extraordinary effort”.

“Our country needs a strong jolt, as does our production system. The government believes it has the right policies to this end,” he said.

Italy’s finances have been dragging due to high labour costs, lagging productivity and strong competition from Asia in such sectors as clothing and furniture.

The government needs to boost growth while cutting its debt and deficit to conform with European monetary union rules.

Prodi renewed his campaign pledge to slash the payroll tax by 5% during his first year in power, a move aimed at helping Italian businesses regain a competitive edge.

Underscoring a sense of urgency, he said Italy needs to act quickly to take advantage of a recent economic upswing and insisted that only by restoring growth would it be possible to correct the country’s creaky public finances.

In a letter to employees today, new Economy Minister Tommaso Padoa Schioppa, a former European central banker, warned that the road ahead would be “steep”, and said priorities included growth, competitiveness and transparency in public accounts.

In his senate speech, Prodi also said that an “ethical shock” was needed in a country where “a climate of tolerance and addiction to ethically reprehensible, if not outright illegal, behaviour, to sensational conflicts of interests … has been produced” – an apparent reference to Berlusconi.

Prodi also made a reference to a massive scandal that has engulfed Italy’s favourite sport – soccer – and outraged the nation.

The premier appealed for unity, but at the same time vowed to either revise or undo some of the reforms put in place by the conservatives, including conflict-of-interest legislation, a contested labour reform that introduced some flexibility in the rigid Italian labour market and a tough immigration law that Prodi described as “both demagogic and ineffective”.

“It was a low-profile speech, but one that was clear in its desire to promote counter-reforms and deepen the rift that divides the country,” said senator Maurizio Sacconi, a member of Berlusconi’s Forza Italia party and former labour undersecretary.

The April 9-10 elections that Prodi’s coalition narrowly won highlighted a bitterly and virtually evenly divided nation.

While Prodi’s majority in the Senate is slim, he can count on a wider margin in the lower house thanks to a majority bonus awarded by the electoral law to increase government stability.

However, Prodi’s diverse and potentially unwieldy coalition – ranging from Communists to Christian Democrats – has also raised doubt’s over the government’s long-term stability.