By Stephen Brown
10 minutes ago



ROME (Reuters) - Italy's Silvio Berlusconi pledged on Tuesday to use his big election win to push through economic reforms, and vowed to close the border to illegal immigrants in a crackdown on criminals he called "the army of evil."


The 71-year-old conservative secured a third term as prime minister but owed his majority in parliament to the support of the xenophobic Northern League, which won 8 percent of votes.

In comments likely to be applauded by the League, he promised tough measures against crime, blamed by many Italians on illegal immigrants, as well as an Italian rescue for Alitalia airline and an end to a garbage crisis in Naples.

"One of the first things to do is to close the frontiers and set up more camps to identify foreign citizens who don't have jobs and are forced into a life of crime," Berlusconi said.

"Secondly we need more local police constituting an 'army of good' in the piazzas and streets to come between Italian people and the army of evil," he said in a television interview.

A staunch ally of Washington in its "war on terror" when he was last in power, Berlusconi had a call from President George W. Bush congratulating him on winning Sunday and Monday's vote.

"The president looks forward to working with him again," said White House spokeswoman Dana Perino.

But credit ratings agencies were wary of Berlusconi, whose last government in 2001-2006 saw a reversal of a long-running decline in Italy's public debt, the third highest in the world.

Standard & Poor's said he had a "sufficiently robust mandate" to tame spending and raise productivity, but his willingness to liberalize the economy and cut debt was "questionable."

Fitch said Berlusconi's promised tax cuts must be matched by lower spending, while any repeat of his last government's tax evasion amnesties would be "a retrograde step."

BLACKMAILING OVER

Although many Italians are disillusioned with politics and doubt any government can quickly cure the ills of the European Union's fourth-largest economy, Berlusconi's strong position would help him to push reforms through parliament.

"This framework is good news: the blackmailing power of smaller parties has been drastically reduced, and Italy is now more aligned to the experience of several other European countries," said UniCredit bank economist Marco Valli.

Parliament has been purged of tiny parties which have held governing coalitions hostage and will now only have six parties as opposed to 20 after the 2006 election. Romano Prodi quit as prime minister in January after a small Catholic party defected.

"Now we'll govern like major Western democracies, with one major party in power and one major party in opposition," said Berlusconi. "With the extremists gone ... we'll operate extremely quickly in parliament and get to work modernizing this country."

His campaign pledges included tax cuts on first homes and on overtime income to help consumers and boost growth.

But economists say he has a record of failing to carry out meaningful reforms and control spending, while his main allies are protectionist parties who may obstruct reforms.

The election made the Northern League the third-largest force after Berlusconi's People of Freedom and the defeated Democratic Party of Walter Veltroni. Berlusconi has promised the League at least two cabinet posts.

The anti-immigrant League's leader, Umberto Bossi, told one paper the government must overhaul tax laws and crack down on illegal immigration or risk its anger. "Now we need to do reforms, or we will lose our patience," said Bossi.
A drubbing for the far left means Italy will not have a communist or socialist lawmaker in parliament for the first time in recent memory. The League's deputy leader Roberto Maroni said this meant "the Berlin Wall has now fallen in Italy too."

(Additional reporting by Valentina Za; Editing by Timothy Heritage and Ibon Villelabeitia)

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