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Italian unions to strike over government budget

By Roberto Landucci

ROME (Reuters) - Italy's three main trade union confederations will hold rolling strikes and protests against the government's 2014 budget plan, they said on Monday, piling more pressure on Enrico Letta's fragile coalition.

Unions, employers and even politicians from among the ruling parties have complained the budget does too little to reduce taxes, reverse years of austerity or reform an economy which has been in recession for two years.

The fiscal law, which aims to lower Italy's budget deficit to 2.5 percent of output in 2014 from a targeted 3.0 percent this year, has become a focal point of discontent against the unpopular left-right coalition government.

On Friday strikes by smaller left-wing unions hit transport, education and public services and on Saturday demonstrators clashed with police in Rome as tens of thousands protested against austerity.

Luigi Angeletti, head of the moderate UIL union, said that to preserve his government's stability Letta had bowed to political vetoes from coalition partners which had blocked promised bold spending cuts and tax reductions.

"Everything stays the same, Letta shouldn't have made a budget to stabilize the government, he should have created one to stabilize the country," he told reporters after a meeting the chiefs of the larger CISL and CGIL confederations.

The unions called for major changes to the budget law during its passage through parliament, where it must be approved by the end of the year, but they stopped short of calling a nationwide general strike.

Instead they will hold half-day strikes among various categories of workers up to mid-November, when they will meet again to assess whether the government has responded to their demands and decide on future action.

Letta described the unions' decision as "hasty" during an interview on the La 7 TV channel. He said he would discuss the budget with the unions, saying it would help Italians by avoiding tax hikes and cuts to healthcare spending.

Ruling parties on both sides of Letta's coalition of former rivals have promised to change the budget, prompting a warning from head of state Giorgio Napolitano that amendments must not flout Italy's public finance commitments to the European Union.

While Angeletti and CISL head Raffaele Bonanni demanded more cuts to wasteful public spending, leader of the left-wing CGIL Susanna Camusso called on Letta to raise levies on income from financial investment and cut taxes for workers and pensioners.

Former Prime Minister Mario Monti joined the chorus of criticism over the weekend, accusing Letta of undoing the good work of his government and being "on its knees" before the policy diktats of Silvio Berlusconi's center-right.

(Additional reporting by Catherine Hornby, Writing by Gavin Jones; Editing by Ruth Pitchford and Barry Moody)

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