Empresas y finanzas

Berlusconi to target economy and crime

By Stephen Brown

ROME (Reuters) - Italy's Silvio Berlusconi pledged onTuesday to use his big election win to push through economicreforms, and vowed to close the border to illegal immigrants ina crackdown on criminals he called "the army of evil".

The 71-year-old conservative secured a third term as primeminister but owed his majority in parliament to the support ofthe xenophobic Northern League, which won 8 percent of votes.

In comments likely to be applauded by the League, hepromised tough measures against crime, blamed by many Italianson illegal immigrants, as well as an Italian rescue forAlitalia airline and an end to a garbage crisis in Naples.

"One of the first things to do is to close the frontiersand set up more camps to identify foreign citizens who don'thave jobs and are forced into a life of crime," Berlusconisaid.

"Secondly we need more local police constituting an 'armyof good' in the piazzas and streets to come between Italianpeople and the army of evil," he said in a televisioninterview.

A staunch ally of Washington in its "war on terrorism" whenhe was last in power, Berlusconi had a call from PresidentGeorge W. Bush congratulating him on Sunday and Monday's vote.

"The president looks forward to working with him again,"said White House spokeswoman Dana Perino.

Berlusconi said he had received similar calls from theleaders of Germany, France, Britain and Spain and Russia'sVladimir Putin, who will visit him in Sardinia later this week.

Famous for once making a two-fingered sign behind a Spanishminister's head at a photo call, Italy's prime minister-electtold a news conference he would now be "the oldest -- sorry, Imean the wisest" at European summits.

But credit ratings agencies were wary of Berlusconi, whoselast government in 2001-2006 saw a reversal of a long-runningdecline in Italy's public debt, the third highest in the world.

Standard & Poor's said he had a "sufficiently robustmandate" to tame spending and raise productivity, but hiswillingness to liberalise the economy and cut debt was"questionable".

Fitch said Berlusconi's promised tax cuts must be matchedby lower spending, while any repeat of his last government'stax evasion amnesties would be "a retrograde step".

BLACKMAILING OVER

Although many Italians are disillusioned with politics anddoubt any government can quickly cure the ills of the EuropeanUnion's fourth-largest economy, Berlusconi's strong positionwould help him to push reforms through parliament.

"This framework is good news: the blackmailing power ofsmaller parties has been drastically reduced, and Italy is nowmore aligned to the experience of several other Europeancountries," said UniCredit bank economist Marco Valli.

Parliament has been purged of tiny parties which have heldgoverning coalitions hostage and will now only have six partiesas opposed to 20 after the 2006 election. Romano Prodi quit asprime minister in January after a small Catholic partydefected.

"Now we'll govern like major Western democracies, with onemajor party in power and one major party in opposition," saidBerlusconi. "With the extremists gone ... we'll operateextremely quickly in parliament and get to work modernisingthis country."

His campaign pledges included tax cuts on first homes andon overtime income to help consumers and boost growth.

But economists say he has a record of failing to carry outmeaningful reforms and control spending, while his main alliesare protectionist parties who may obstruct reforms.

The election made the Northern League the third-largestforce after Berlusconi's People of Freedom and the defeatedDemocratic Party of Walter Veltroni. Berlusconi has promisedthe League at least two cabinet posts.

A drubbing for the far left means Italy will not have acommunist or socialist lawmaker in parliament for the firsttime in recent memory. The League's deputy leader RobertoMaroni said this meant "the Berlin Wall has now fallen in Italytoo".

(Additional reporting by Valentina Za; Editing by TimothyHeritage and Ibon Villelabeitia)

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