Italy - Domestic policy

Berlusconi has long believed that his credentials as the richest man in Italy makes him fit to modernize the state's political system as well as the nation itself. This view is generally shared by the populace and forms the base of his appeal. As long as they continue to identify with him as a self-made man, his policies have a chance of succeeding. Deciding just what those policies are, however, is elusive. He has pledged to cut taxes and reduce the unemployment roles, reform public administration, tighten law and order, introduce large infrastructure projects, and increase state pensions. A reform of the pension system is needed, for Italy has one of the lowest birth rates and a rapidly aging population. Generous rules and allowance will stretch the system to its limits if no changes are undertaken in the next few years. In shaping his reforms, Berlusconi will have to deal with trade unionists, unreconstructed Communists, and old-fashioned Catholics who want Italians to have jobs for life, generous state pensions, and extensive public health service. And he must face off with old-order coalitions in parliament who still want to sell off state assets, liberalize the service sector, and loosen the job market.