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Berlusconi pledges reforms to EU summit

Updated: 2011-10-27 17:44

(Agencies)

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ROME - Italian Prime Minister Silvio Berlusconi presented European leaders on Wednesday with a hastily constructed package of economic reforms in response to an ultimatum demanding action to boost growth and cut Italy's huge public debt.

It was not clear whether the leaders meeting in Brussels, who have been highly skeptical about Berlusconi's ability to deliver, would be satisfied by a series of promises of future measures to get Italy out of the firing line in the euro zone debt crisis. ?

Berlusconi, in political trouble at home, had been caught between the EU ultimatum and the refusal of his Northern League partners in a centre-right coalition to make more than slight concessions on pensions -- a key plank of the reform programme.

A poisonous political climate in Rome has made it difficult to reach agreement on reform and tensions over the programme broke into the open in parliament, where opposition and government deputies exchanged blows before the sitting was suspended. ?

After tense coalition talks late on Tuesday, Berlusconi carried a "letter of intent" to the summit, which promised a much delayed economic development plan by November 15 and a series of other measures to boost growth and ensure the budget is balanced by 2013.

They included a commitment to raise the pension age to 67 by 2026, and steps to cut red tape and improve conditions for business. ?

Berlusconi's political position is so weak he has little room for manoeuvre. The 75-year-old premier, badly weakened by sex scandals, corruption charges and political setbacks, made no comment to reporters as he arrived for the summit. ?

Initial market reaction to a minimalist pension deal with League leader Umberto Bossi was not encouraging, with Italy paying the highest yield in more than three years on six-month treasury bills at an auction on Wednesday.?

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