ITALY’S MAIN left-wing trade union federation yesterday threatened to call a one-day general strike next month in protest against the centre-right government’s austerity package that Silvio Berlusconi declared was necessary to defend the euro.

Guglielmo Epifani, leader of the CGIL federation, also called for protests in Rome on June 12th by public sector workers who face a three-year freeze on wages as part of the €24.9 billion deficit-cutting measures.

The union’s leadership will meet in the second week of June to reach a final decision.

“The cuts are all concentrated on workers, the same old recipe that leaves out high earners,” Mr Epifani said.

A strike by CGIL members could cause considerable disruption across Italy but the issue appears likely to divide the labour movement with two other major federations stopping short of calling on workers to down tools.

Italy’s billionaire prime minister broke his silence on the austerity package, which the cabinet approved late on Tuesday, at a joint press conference with Giulio Tremonti, finance minister, denying press reports of serious divisions between them.

Mr Berlusconi said taxes would not be increased and cast the deficit cuts in the context of a joint European effort to slash government spending. The welfare system in Italy had become “irresponsible”, he said.

“The sacrifices are absolutely necessary to defend our currency. It is necessary to defend the euro in order to save the future of Italy, its wealth, our wages, and family saving,” Mr Berlusconi said, looking tense and reading from a prepared text.

“We are all in the same boat that is moving forward and we will overcome this difficult situation.”

On public sector workers looking forward to retirement, Mr Berlusconi said: “We are only asking them to stay at work for a couple of months more.”

The government decree covering 2011 and 2012 includes wage cuts for ministers and parliamentarians, reductions in subsidies for political parties and spending by ministries, and €9 billion in cuts for regional governments. It will be joined by a crackdown on tax evasion, which Mr Berlusconi said cost the state €120 billion a year. – (Copyright The Financial Times Limited 2010)