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Italy Government Wins Key Vote

October 16, 1997

ROME (AP) _ Romano Prodi’s center-left coalition government won a confidence vote Thursday, but faced harsh criticism from big business for cutting a deal with hard-line communists to win their support.

The small Communist Refoundation Party had forced Prodi to resign last week when it refused to back $3 billion in budget cuts the government says are vital for Italy to qualify for the single European currency.

On Tuesday, Prodi and the communists worked out a pact that allows him to stay on in exchange for introducing legislation that would reduce the workweek from 40 to 35 hours. The goal is to create new jobs, Refoundation’s key aim.

Italy’s business community was up in arms over the deal.

``I say that for businesses the situation is unacceptable,″ said Giorgio Fossa, head of Confindustria, the Italian industrialists association.

Fossa said a 35-hour workweek would raise costs and decrease productivity. ``If I reduce my competitiveness, how will I do in Europe?″ he said.

Confindustria threatened to freeze the renegotiation of nationwide labor contracts if the government doesn’t back down from the proposal.

Among the most vocal critics was Fiat Chairman Cesare Romiti, who insisted that there is no proof that reducing the workweek would create new jobs in Italy, where the jobless rate is at 12 percent.

Confindustria said Thursday it would meet with unions to discuss the government’s proposal.

President Oscar Luigi Scalfaro asked Prodi on Tuesday to come back as premier after Prodi and Fausto Bertinotti, Refoundation’s leader, patched up their alliance.

In a speech to the Chamber of Deputies before the 319-285 vote of confidence, Prodi defended his government, insisting it had not shifted further to the left following his pact with the communists.

``The government is the same as that formed after the April 1996 elections,″ Prodi said. ``The core of our programs has not changed.″

He urged lawmakers to put the crisis behind them and quickly approve the 1998 budget, including the $3 billion in spending cuts, mostly from pensions and other social benefits.

Bertinotti, also speaking to the Chamber, called the industrialists ``selfish and arrogant.″

``We are interested in strengthening the (government) majority for programs we want,″ Bertinotti said.

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