trouble brewing in Italy?

[Scott Marshall <Scott@xxxxxxxxxx>]

         ROME, Jan 16 (Reuter) - An Italian union leader on Tuesday
warned that some estimates the country will need a 70 trillion
lire ($44.33 billion) deficit-cutting budget in 1997 to meet the
terms in the European Union's Maastricht treaty was too high a
price to pay.
         Several economists have said Italy will have to raise 70
trillion lire next year if it is the reach the goal of a budget
deficit amounting to three percent of gross domestic product --
one of the key demands in the Maastricht treaty for countries
looking to join the first wave of European monetary union.
         ``We have to check if a corrective of budget of 70 trillion
lire is really necessary. If it is and we have to cut back on
the welfare state then we won't support it,'' said Pietro
Larizza, leader of Italy's third largest union, the UIL.
         Speaking at a joint news conference of Italian union chiefs,
Sergio Cofferati, head of the large Cgil labour movement, lashed
out at widespread reports that Italy will need a 70 trillion
lire budget next year.
         ``To put things in this way is pure terrorism,'' he said. ``It
would be difficult for anyone to bear that sort of budget and
it's not even true that it would work,'' he added.
         Cofferati and Sergio D'Antoni, leader of the coutry's second
largest union the Csil, said to make sure of Italy's place in
European Monetary Union (EMU), the country would have to cut
inflation from the 5.8 percent seen in December.
         ``We can push through all the budgets we want but if
inflation doesn't fall we'll never make it for Maastricht
anyway,'' D'Antoni said.
  ($<1579 Lire)



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