By Silvia Aloisi
ROME (Reuters) - Italian Prime Minister Silvio Berlusconi, whose conservative government is hanging on by a thread, said on Monday he would present a plan next month that would aim to triple Italy's growth rate within five years.
Berlusconi said in a statement the plan would target GDP growth of 3 to 4 percent in five years, a level of economic expansion not seen in Italy for over a decade and some three times the 1.3 percent rate forecast by the government in 2011.
The premier, who narrowly survived a no-confidence vote last month, is mired in a prostitution scandal and many commentators say the country may face an election in the next few months.
Berlusconi said he would slash red tape and put tax breaks for the poor south on top of the agenda at the next cabinet meeting, and that next month the government will discuss how to kickstart growth with employers and unions.
"We need to free Italy definitively from a welfare and public sector mentality which is depressing development, hindering investment and the creativity of markets, destroying wealth and labour and threatening the future of new generations," he said in a statement.
He said a "great national plan for growth" was the only "serious proposal on the table to revive the economy and the Italian society" and to lower public debt.
Italy's economic growth has lagged way behind its European peers for over a decade and the head of the country's largest business lobby earlier this month lambasted the government for inaction over much-needed reform.
The last time the euro zone's third largest economy grew above 3 percent was a blip in 2000, and it has not grown steadily anywhere near that kind of rate since the second half of the 1980s.
SLUGGISH
According to calculations by Global Finance magazine based on International Monetary Fund data, Italy was the world's fourth most sluggish economy between 2000 and 2010 after Zimbabwe, Eritrea and Haiti. Berlusconi has been in power for seven years during that decade.
Italy also has one of the euro zone's highest debt burdens at an expected 119 percent of national output this year.
In an unusually conciliatory gesture, Berlusconi earlier invited the main opposition party to work together on a economic growth plan including tax breaks for businesses.
The centre-left reacted coldly to Berlusconi's sudden olive branch, saying it smacked of desperation and was an attempt to divert attention from the latest sex scandal engulfing him. He later said that reaction showed they were irresponsible.
"Berlusconi is not even good at propaganda anymore. The only useful thing that he can do for Italy is resign," said Stefano Fassina, the PD official in charge of economic affairs.
The PD and other opposition parties say Berlusconi's position has become untenable following an investigation into allegations he paid for sex with young women, including a 17-year-old nightclub dancer.
They say he should step down and pave the way for an interim government to be formed or, if that is not possible, for early elections two years before the end of his term of office.
Berlusconi denies any wrongdoing and says he has never paid for sex. He says politically-motivated leftist magistrates are bent on destroying him and insists he will not resign.
(Additional reporting by Antonella Ciancio; editing by Stephen Nisbet, Ron Askew)
