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Italian premier resigns after losing budget fight
October 9, 1997
Web posted at: 10:51 a.m. EDT (1451 GMT)ROME (CNN) -- Italy's 17-month-old center-left government collapsed Thursday, and Premier Romano Prodi resigned after Communist hard-liners rejected his appeal for massive budget cuts. Prodi had sought them so the country would qualify to join the European Monetary Union in 1999.
Prodi's government had been attempting to put together a package of concessions that would satisfy the Communists, who objected to plans to trim about $2.8 billion in welfare spending and pensions in next year's budget.
But two days of parliamentary debate and backroom discussions failed to persuade his Communist allies to support his budget proposal. On Thursday, they said they were withdrawing their support for Prodi's government.
"I will go to (President Oscar Luigi Scalfaro) to tender my resignation," Prodi later told the lower house of Parliament, the Chamber of Deputies. Scalfaro asked him to stay on in a caretaker capacity until a new government is formed.
Deputy Premier Walter Veltroni said he believed early elections would be necessary.
The Communists had sought concessions on pensions, health care, job creation and a shorter work week. Prodi, who made some compromises in a bid to satisfy the demands, had warned that if his government failed, Italy's chances for joining a single European currency might fail, too.
Prodi led Italy's 55th government since World War II and the first dominated by leftists.
Reporter Wolf Achtner contributed to this report.
Related stories:
- Thousands of Italian workers rally for more jobs - March 22, 1997
- Leftist coalition wins in Italy - April 22, 1996
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