Combative Prodi promises to press on with reforms

ROME, March 2 (Reuters) Romano Prodi vowed to press ahead with economic reforms today during a combative speech to parliament, where he asked for a second and final vote of confidence confirming his return as Italy's prime minster.

Prodi resigned last week after splits in his centre-left coalition meant he lost a foreign policy vote. He won a tight confidence vote in the Senate tomorrow and looked certain to win in the lower house where he has a larger majority.

The result of the vote was due in the early afternoon.

Confident his position was safe, at least for now, and buoyed by better than expected economic data, Prodi stressed his determination to push ahead with reforms aimed at increasing competition and making life easier for would-be entrepreneurs.

''We absolutely won't stop because this is the road towards recovery,'' he told the Chamber of Deputies.

''We've looked at banks, insurance, public services, energy, professions, public works. We're talking about daily life -- young people who want to open a business without relying on contacts or influence -- we're not talking about small things.'' The first wave of reform, carried out last year, was designed to liberalise trades and professions as diverse as taxi drivers, lawyers, pharmacists and bakers, much to the consternation of those already working in areas that have long enjoyed protection from competition.

''This irritates many sectors who reacted when we took those decisions, but we took them anyway,'' said Prodi. ''And rest assured, we will take more, extremely important ones.'' ''POUR SOUL'' Former Prime Minister Silvio Berlusconi, the media tycoon who narrowly lost last year's general election, has forecast that ''poor soul'' Prodi will not last much longer in power.

A poll this week showed 40 per cent of Italians agreed, predicting his government would last just a few more months. He has an almost non-existent majority in the Senate and remains at risk of defections, especially over foreign policy and finance.

Recent economic data has given Prodi grounds to argue that his reforms are working for the good of Italy.

In 2006, the economy bounced back from stagnation to post 2 per cent growth, the strongest since 2000, and the budget deficit looks set to dip below the European Union limit of 3 per cent of gross domestic product this year for the first time since 2002.

Prodi said it was too early to say how much the upturn was structural, but Italy was now on an ''upward path'' and he called on his coalition to press ahead with the reforms.

''I hope there will be a wider consensus in the coalition.

It's clear that on many points we will be divided, but we all share the goal of an economic upturn,'' he said.

Italy's leftists, alarmed at the possibility of the coalition splitting and the return of Berlusconi, pledged to support Prodi.

''We Italian Communists are ready to inaugurate a new season,'' said party head Oliviero Diliberto.

REUTERS SP BST1823