Businessmen to make offer for Alitalia - Berlusconi

Silvio Berlusconi, Italy's prime minister-elect, yesterday said a group of Italian businesses would make an offer for loss-making…

Silvio Berlusconi, Italy's prime minister-elect, yesterday said a group of Italian businesses would make an offer for loss-making Alitalia within weeks but warned trade union leaders to expect "painful" job cuts.

The billionaire businessman, who will be sworn in as prime minister for a third time next month, clashed with trade union leaders over who was responsible for Air France-KLM withdrawing its offer for the flag-­carrier on Monday.

During the recent election campaign Mr Berlusconi had been critical of a proposed takeover of Alitalia by Air France-KLM. He has now blamed the unions' "veto" for halting the talks.

Union leaders reacted with predictable outrage and Mr Berlusconi later moderated his comments.

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However, the exchange revealed the difficulties the new centre-right government might encounter in persuading the unions to accept large-scale job cuts.

The outgoing centre-left government agreed to Mr Berlusconi's request on Tuesday night to provide Alitalia with a €300 million loan in order to stave off bankruptcy and give the incoming administration two or three months to find a buyer for the state's 49.9 per cent stake.

The European Commission said that it would act quickly to determine whether the loan broke rules on providing state aid.