Bloomberg News

Berlusconi Calls Cabinet Meeting to Pass Measures Before G-20

November 02, 2011

Nov. 2 (Bloomberg) -- Italian Prime Minister Silvio Berlusconi called a Cabinet meeting tonight to pass emergency economic measures before a Group of 20 summit as the nation’s borrowing costs remained near euro-era highs.

The Cabinet will meet at 8 p.m. in Rome, the premier’s office said in an e-mailed statement today. Transport Minister Altero Matteoli said it will pass a decree to speed up economic reforms pledged by Berlusconi in a letter sent to the European Commission last week.

Berlusconi is struggling to prevent Italy from succumbing to Europe’s sovereign-debt crisis. He vowed yesterday to accelerate measures such as easing labor rules to facilitate firing and selling assets after Italian borrowing costs surged to euro-era records following Greek Prime Minister George Papandreou’s decision to hold a referendum on its bailout.

Berlusconi wants to show he’s making progress in fighting the crisis when he meets with fellow G-20 leaders at the summit starting tomorrow in Cannes, France, newspapers including Corriere della Sera reported. The yield on Italy’s 10-year bond climbed as high as 6.34 percent yesterday, the highest since the creation of the euro. The yield fell to 6.17 percent as of 4:16 p.m. in Rome.

The premier and key ministers including Finance Minister Giulio Tremonti spent much of the morning working on the decree, following up on talks last night. Tremonti was also leading a meeting this afternoon of Italy’s Committee for Safeguarding Financial Stability, which includes new Bank of Italy Governor Ignazio Visco and Treasury Director General Vittorio Grilli.

President’s Appeal

President Giorgio Napolitano yesterday urged the government to immediately implement the promised economic measures, and said he was consulting with opposition leaders in a bid to seek the broadest possible support for the overhaul. The European Central Bank has been buying Italian government bonds since Aug. 8 in a bid to drive down borrowing costs for the country, which has the euro region’s second-biggest debt load at 120 percent of gross domestic product.

Italy needs to restore investor confidence by boosting economic growth and reducing debt, Corrado Passera, chief executive officer of Intesa Sanpaolo SpA, Italy’s second-biggest bank, said in an interview today.

Such steps may require “discontinuity in the leadership of the country,” Passera told Bloomberg Television. “I don’t know if this government can guarantee this discontinuity, but certainly a different strength, a different commitment has to be taken in terms of public accounts.”

----With assistance from Flavia Rotondi and Sara Eisen in Rome, and Sonia Sirletti in Milan. Editors: Jeffrey Donovan, Simone Meier


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