Facing parliament for the first time, the 39-year-old Renzi who is
Italy's youngest premier, sketched out an ambitious program of
change in an hour-long speech delivered in his trademark quickfire
style interspersed with occasional jeers from the opposition
"If we lose this challenge, the fault will be mine alone," he told
the Senate. The euro zone's third-largest economy is in urgent need
of potentially painful reforms and is weighed down by a
2-trillion-euro public debt.
Backed by his own center-left Democratic Party (PD), the small
center-right NCD party, centrists and other minor groups, Renzi won
the backing of the upper house by 169 votes to 139 in a vote taken
in the early hours of Tuesday morning.
The outgoing mayor of Florence, who won the leadership of the PD in
December, forced his party rival Letta to resign as prime minister
earlier this month after repeatedly criticizing his government's
Renzi promised sound public finances, which he said was a duty Italy
owed to its own children rather than to its European Union partners.
But he offered little detail and did not say whether his government
would seek any easing in tight EU budget limits as he has suggested
in the past.
U.S. President Barack Obama telephoned Renzi on Monday, welcoming
the new government's reform agenda and its focus on jobs and growth,
Renzi's office said in a statement.
The new premier promised to make it cheaper for companies to take on
staff by reducing payroll taxes in the first half of the year with a
double-digit cut in the so-called tax wedge, which is the difference
between what it costs a company to employ a worker and the worker's
He said the measure would be financed by spending cuts and other
measures and said the government would evaluate increasing tax on
financial income to pay for a wider labor shake-up.
On Sunday, his chief of staff Graziano Delrio caused a stir by
suggesting the government was considering raising taxes on
government bonds, which are popular with Italian savers.
Renzi took office on Saturday promising a radical increase in tempo,
with an overhaul of the electoral and constitutional system to
ensure more stable governments in future, tax and labor reforms and
a shake-up of the bloated public administration, all within his
first 100 days.
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The tone of his speech was direct and colloquial, in contrast to the
sober style of his two predecessors, Letta and Mario Monti. Noting
that, at 39, he was not even old enough to hold a seat in the
Senate, where the minimum age is 40, he said that politics had lost
touch with citizens.
"If we'd paid the same attention to what people say in their local
markets that we often paid to the financial markets, we would have
noticed that the first thing people want is simplicity," he said.
He said the government's priority had to be to help small businesses
and people who had lost their jobs and he promised to strengthen
welfare protection for the unemployed. He also said the government
would make "a few billion" euros available for urgently needed
investment in school buildings.
The public administration would completely pay off its arrears of
unpaid bills, completing a campaign to free up billions of euros
owed to private sector suppliers begun by his predecessor Letta.
He gave little detail about how he intended to fill the funding gap
left by paying off the arrears but said it could involve the
state-owned investment holding Cassa dei Depositi e Prestiti (CDP).
A comprehensive package of reforms to the notoriously sluggish
justice system would be completed by June and long-promised
electoral and constitutional reforms would be in place and ready to
go before parliament by the end of March.
The Senate vote will be followed by a separate vote on Tuesday in
the lower house, where the PD has a strong majority, wrapping up the
parliamentary process required by every new government.
(Additional reporting by Steve Scherer and Giuseppe Fonte;
by Alison Williams, Toni Reinhold)
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