ENGLAND: Italian Prime Minister Romano Prodi sees no change in Europe-US relations post-midterm elections; backs Economy Minister and vows Italy will continue to grow

Italian Prime Minister Romano Prodi said relations between the US and Europe, especially Italy, will remain strong after Democrats are expected to take control of the House of Representatives and possibly the Senate from the Republicans on Tuesday's (November 7) elections. Despite differences on Iraq, Prodi says Italy remains in agreement with the US on wider issues such as the war on terror. "I think that concerning the relations between Europe and US, nothing really substantial will change inthe next two years. The administration will be the same and I don't think that now we have a major change. We shall have a deeper debate inside the American society especially concerning Iraq. Public opinion is deeply changing and from this point of view , the president will have a deep challenge. But not mainly because of the change in chambers but a change in public opinion," Prodi said in an exclusive interview with Reuters on Monday (November 6). "Well, the Italian relations with the US are very good and very clear you know. I always told to the President even when I was president of the European Commission that I didn't agree on the Iraq policy but that we needed to stick together on the main issues of ... world policy. And we work together against terrorism, we work together in order to facilitate trade relations and economic integration and we did it well even in the most delicate issues ... and I think we can work together very well but on Iraq there was a completely different point of view," Prodi added. Prodi also said on Monday it was "inconceivable" that his Economy Minister Tommaso Padoa-Schioppa would resign over the unpopular 2007 budget plan, calling him one of Europe's top ministers. Padoa-Schioppa said in a newspaper interview published on Monday that Prodi should expect resistance to economic reforms meant to shrink the budget deficit for at least two years. "My problem is that the critics are coming from the left and right. This is the case. There are complaints made by the labour union, complaints made by the entrepreneurs, complaints made by the administrators," said Prodi. Opposition from unions, business and members of the ruling coalition to plans to cut the 2007 deficit by about 15 billion euros has put Prodi's future as leader of the nine-party bloc into question. At the same time debt ratings agencies critical of moves to water down the savings measures downgraded Italy last month. Presented in September, the budget, which includes tax cuts for low earners and tax hikes for the better-off, must be approved by both houses of parliament by the end of the year. Italy's deficit has exceeded the European Union's 3 percent of gross domestic product limit for the last three years and this year's deficit, targeted at 4.8 percent, will be the highest since 1996, before European monetary union started. Prodi said his aim was not just to cut spending but also to spur growth, saying he would like to move the country up to the middle of the growth ranking of the 25 European Union members from its current position of second from bottom. Growth was zero last year and the government's target for 2006 is 1.6 percent of GDP.

ITN Source | November 7, 2006

Tags:. .terrorism. .targeted. .prime. .europes. .unions