Italian Minister Offers To Resign Over Pensions

Italy's European Affairs minister offered to resign on Tuesday in protest at the hard line taken by leftist coalition allies in negotiations over a pension reform that has split the government in half.

Emma Bonino, a former member of the European Commission, said she would leave it to Prime Minister Romano Prodi to decide whether she should step down.

"I wrote a letter to Prodi leaving to him the decision over my continuing in the government," Bonino, a former member of the European Commission, told a news conference.

Bonino is the only cabinet member from the small Rose in the Fist party, and her resignation would not in itself bring down the government.

But she would be the first minister to resign since Prodi took office last year and that would be a serious political blow at a time when the government's popularity ratings are slumping.

The government and trade unions have been in talks for weeks over plans to raise the retirement age to ease the burden of Italy's pension system on state coffers.

Bonino favours the original version of the reform that would raise the pension age to 60 from 57 starting from next year, which Prodi's government inherited from its centre-right predecessor.

But unions and leftist parties in the nine-party, Catholics-to-communists coalition want a more gradual rise, spread out over several years.

The Communist party, whose stance on the issue has been more rigid than that of the unions, at the weekend approved a rise only to 58, with incentives paid to those who want to work beyond that age.

Prodi is due to come up with a compromise proposal by Friday, and he is expected to make some concessions to his leftist allies.

Bonino said she wanted to know whether she was still "compatible" with the line of the government, and accused the unions and the Communist party of being "conservative, if not reactionary".

The European Union and international financial institutions have long warned Italy, which has one of the fastest ageing populations and one of the highest debt mountains in the world, that its current pension system is not affordable in the long run.