Millions of Italians stopped work yesterday in protest at the economic policies of Silvio Berlusconi’s government.

 

A nationwide half-day stoppage crippled public transport and shut factories and banks. Alitalia cancelled more than 100 flights.

 

Government departments and post offices were shut all day. Doctors and nurse also staged an eight-hour strike, though emergency services were maintained.

 

The action was originally called by the main trade union federations, and backed by the opposition, to protest at an austerity budget for 2005 that imposes sacrifices worth €24bn (?bn) in the form of spending cuts and additional levies.

 

But last Saturday Mr Berlusconi wrong-footed his critics by persuading his ministers to agree to €6.5bn of tax cuts – a measure which polls suggest has given his popularity ratings a much-needed, if so far modest, fillip.

 

The weather yesterday worked against the opposition.

 

Most of the 70-odd demonstrations around the country organised by the trades union federations took place in driving rain.

 

In Rome, Romano Prodi, making a comeback as unofficial leader of the Italian opposition, declared the strike was “not just ‘anti’, but a way of bringing everyone together to prepare something better for the future”.

 

Mr Berlusconi was voted into office largely because Italians believed the billionaire-turned-politician could bring his Midas touch to bear on Italy‘s sclerotic economy.

 

Three years on, and despite reforms of the pension system and the labour market, Italy still has one of the lowest growth rates in Europe. A string of high- profile corporate failures, most recently that of the low-cost airline Volare, have highlighted underlying problems in the Italian economy.

 

Both the employers’ federation and a small trade union federation close to Mr Berlusconi’s government have recently been critical of its policies.

 

The prime minister had promised tax cuts before the

 

2001 election, but has been constrained in part by Italy‘s membership of the euro, which commits the government to prudent fiscal housekeeping.

 

Mr Prodi predicted yesterday that the tax cuts announced last weekend would force the government to demand further sacrifices next year if it was to keep its word to its euro-zone partners.

 

He challenged the government’s contention that it had found the money to pay for the tax cuts. “The €6bn the government talks about isn’t there,” Mr Prodi said.

 

Trade union leaders, meanwhile, concentrated their fire on the way the tax cuts are to be shared out. Savino Pezzotta, who leads the CISL, Italy‘s second-largest labour federation, said that next year’s budget would “give more to those who have most and less to those who have least”.

 

High-income single people will be particularly favoured by the tax cuts, which offer almost nothing to the lowest earners. But the budget will also bring relief to middle-class families with incomes of around ?,000.

 

Mr Berlusconi is clearly hoping it will help his party to recover some of the voters who have deserted it in recent polls, significantly weakening his own clout within the coalition he heads.

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