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Italy's Monti fires opening salvo of second-term campaign

Italy's outgoing Prime Minister Mario Monti gestures during a news conference in Rome December 28, 2012. REUTERS/Tony Gentile
Italy's outgoing Prime Minister Mario Monti gestures during a news conference in Rome December 28, 2012. REUTERS/Tony Gentile

By Steve Scherer

ROME (Reuters) - Italy's outgoing Prime Minister Mario Monti pledged to cut labor taxes to fuel growth on Wednesday as he shed his neutral technocrat stance and fired the opening salvo of his campaign for a second term.

The former European Commissioner was appointed in November 2011 to lead an unelected right-left government of experts to save Italy from financial crisis after Silvio Berlusconi quit amid a sex scandal and a crisis that threatened the euro.

Berlusconi's party withdrew its support for Monti in December, and Monti resigned on December 21, about two months earlier than had been planned.

On Friday Monti abandoned his mediator role he played to enter politics in his own right and lead a centrist alliance to fight the February 24-25 parliamentary vote.

The 69-year-old's bloc is now in a three-way race with the Democratic Party (PD) on the left and four-time prime minister Berlusconi's People of Freedom (PDL) on the right - his allies until 12 days ago.

A poll published on Wednesday said Monti's bloc would win 12 percent of the vote, while one published last week said it could gain up to 16 percent, depriving rivals of a clear win, but not enough to govern.

They show the PD and its coalition ally are on track to win the vote, at least in the lower house. Monti repeated on Wednesday that he wanted to form a broad coalition of pro-Europe, pro-reform parties after the election.

To Italians who have borne the brunt of austerity measures he introduced in late 2011 to save Italy from a Greek-style debt crisis, Monti promised to lower labor taxes and "redistribute" wealth from the richest to the poorest if he wins.

"We need to reduce taxes on the labor force, both on workers and companies, by cutting spending," he said in an hour-long interview with state radio.

Monti again ridiculed Berlusconi, saying he was personally "confounded" by his "illogical" swings from praising his government to attacking it.

"I hope voters are less confused than I am," he said. The 76-year-old Berlusconi has attacked Monti, saying he took orders from German Chancellor Angela Merkel, while at the same time offering him the leadership of the center-right.

"Monti is no longer credible," Berlusconi counter-attacked in an interview on SkyTG24. "He broke his word" by entering the election race after promising he would not when he took over as head of a technocrat government, Berlusconi said.

Berlusconi also said that he could cede the premiership to someone else should his bloc win the election, probably as a way of renewing an alliance with the Northern League party.

The Piepoli poll published on Wednesday put Bersani's center-left bloc at more than 40 percent, more than 10 percentage points ahead of the center-right. Without the League, Berlusconi's bloc trails by more than 16 percent.

For the first time, Monti also directly attacked the center-left, saying Pier Luigi Bersani's PD and its SEL ally were too close to labor union positions aimed at protecting jobs and not creating new ones.

BROAD COALITION

The center-left "wants to conserve - for noble reasons and in good faith I'm sure - a crystallized labor market, hyper-protective compared with other countries," Monti said.

Three days after Bersani pressed Monti to say what side of the political spectrum he was on, the former European commissioner responded that he was on the side of those who want to change the country.

"Now we need a new type of government - one that is in favor of reforms and not of conserving the status quo," Monti said. Last week Monti said he wanted to lead a coalition that went beyond the traditional left-right split.

Under the complex electoral law, Bersani's two-party coalition could win a comfortable majority in the lower house without taking a secure command of the Senate, possibly making an alliance with Monti's bloc crucial to creating a stable parliamentary majority.

Pier Ferdinando Casini, leader of Monti's ally the UDC party, said on Wednesday Bersani should not become prime minister if his bloc does not win an outright majority in both houses.

In an interview with newspaper Avvenire, Casini suggested Monti should be given the top job even if his bloc wins fewer votes than Bersani's, an opinion rejected by Bersani's PD.

Monti is the favorite of the markets, the business establishment and the Catholic church, and the PD has said it would continue down the Europe-minded path of Monti's government, though with adjustments to boost growth and jobs.

Monti has helped restore investor confidence in Italy. The key measure of this - the difference in interest rates on Italian 10-year government bonds and safer German Bunds - lay on Wednesday at around half the level it was when he took office.

(Edited by Richard Meares)

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