Italy Seeks Constitutional Amendment Requiring Balanced Budget

ROME -- Italy pledged on Friday to work swiftly for a constitutional amendment requiring the government to balance its budget, as Rome feverishly tried to assure domestic and foreign investors its finances are sound and calm nervous markets in Europe.

Premier Silvio Berlusconi told a hastily convened evening news conference the government will "speed up measures" in its budget law approved last month by Parliament, "with the possibility of reaching a balanced budget by 2013 instead of 2014" as first planned.

His conservative government, now more than three years into its five-year term, will also work to amend the Constitution to include a requirement for a balanced budget, Berlusconi said.

Berlusconi, saying he conferred by phone with world leaders, announced that G-7 finance ministers will meet "within days" about the exploding financial crisis.

Later, his spokesman clarified that convening an "extraordinary meeting" of the G-7 finance ministers was still "at the reflection stage" with no decision yet taken, although Italy favored one.

Concern over the crisis was trans-Atlantic.

"This evening I'll receive a phone call from President (Barack) Obama" because the crisis "pertains to the global financial panorama," Berlusconi said. German Chancellor Angela Merkel's office also said she would be consulting with Obama later Friday.

Finance Minister Giulio Tremonti, who stood beside Berlusconi, said a balanced budget could be achieved by 2013 by speeding up reform of Italy's extensive, and expensive, social welfare system, which includes national health care and generous retirement payments.

Also key to this goal, Tremonti said, would be what he promised as the "mother of all liberalization," especially in Italy's highly regulated world of labor.

"The principle that all will be allowed unless specifically forbidden" by labor laws will be the guiding principle of the government's strategy, Berlusconi said, vowing that that, too, would be soon enshrined in Italy's constitution.

Italy's industrialists and mid-sized employers have complained for decades that Italy's strict laws making firing workers almost impossible discourages them from hiring more employees in moments of need.

Further strategy also includes privatization of sectors, which Tremonti didn't specify, and what he said would be a "speeding up" of investment to improve and modernize infrastructure, as a way to wake up Italy's slumbering economy.

Italy's Parliament went on vacation for a month earlier this week, but on Friday, responding to the quickly worsening economic nervousness, officials of the two chambers said key committees would keep working throughout August.

And all the lawmakers were expected to be summoned back to work as soon as the reforms pushed by Berlusconi is ready for a full vote.