Italian business leaders urge "shock therapy" to promote business

Italian business leaders on Thursday called for "shock therapy" to nurture the country's business community after the new center-left government pledged to reduce labor costs by 5 percent in its first year.

Luca Cordero di Montezemolo, head of of Italy's largest business federation, told business leaders in Rome that domestic firms should reap the greatest benefit from the pledge by Premier Romano Prodi.

"Shock therapy" is needed to slash the country's public debt, which amounts to more than 106 percent of gross domestic product (GDP), the highest among European countries, he said in a keynote speech to the Confindustria gathering.

He urged the government to move further to reduce labor costs by a further 10 percent during its five-year term.

Montezemolo also called for efforts to reduce energy costs, simplify bureaucracy and improve infrastructure.

Italy posted a GDP growth of 0.6 percent in the first three months of 2006, a sign of recovery from the flat months of 2005.

Montezemolo hailed the "first modest signs of revival," saying it is time for the country to "consolidate this tendency," which should not " become a temporary phenomenon."

Source: Xinhua