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The challenge of economic reform in Italy

The challenge of economic reform in Italy
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Reviving a flagging economy should be the top priority for the new Italian government, according to one Rome business owner.

Loredana Pompei has run the Caffe Brasile in the Italian capital for twelve years. She says if Mario Monti forms a government, he must ease the tax burden on small companies so they can grow.

Pompei told euronews that she would like employee contributions to be reduced so she can hire more staff.

“I don’t believe in miracles but I’m afraid they’ll impose new taxes,” she said, adding that Monti’s foray into the political world should only be a temporary one.

Fabrizio Forquet, a senior editor at financial newspaper Il Sole 24 Ore, says the path to economic reform must be brisk.

“We talk about 25 billion euros of savings as if it’s an easy thing. Monti must introduce rigourous reforms and quickly. These reforms will see Italians make great sacrifices, but Italian society will accept them if they see politicians making a similar or greater sacrifice,” he told euronews.

The next government must slash Italy’s public debt, stuck at nearly 120 percent of gross domestic product.

Another challenge is to reform the labour market and business regulation to kick-start an economy that has endured years of sluggish growth.

It is hoped such measures would mean Italy can avoid the fate of Greece, Portugal and Ireland, who were all forced to seek an international bailout.