Unions say the pension system does not need reforming

Prime Minister Silvio Berlusconi's government wants to raise the minimum age of retirement from 57 to 60.

It says this would save 0.7% of GDP annually, providing relief for one of Europe's most indebted economies.

The unions, which staged a first strike in October, say the government wants to save on pensions to reduce taxes.

Revised bill

October's general strike paralysed Italy's land, rail and air transport links - and closed factories and schools.

Protests continued in the capital Rome in December, when an estimated 250,000 workers demonstrated.

ITALY'S PENSIONS DILEMMA Italians fear a poor old age View from an Italian village

The government has already revised its bill in response to workers' action.

It has watered down its initial proposal to allow men to collect full pension only at the of age 65; women at 60 or after they have made 40 years of contributions.

At the moment workers can retire at 57 if they have paid into the pension system for 35 years.

Italy's pension system swallows about 15% of GDP.

The new bill was presented to parliament on Tuesday.

But three unions, representing 11 million workers and pensioners, voted on Wednesday to continue action.

"It is a strike to call for a turnaround in economic policy and to get back to growth," said Guglielmo Epifani, the leader of Italy's biggest union, CGIL.

Mr Berlusconi's first government, in 1994, was toppled over the pensions issue, but his four-party coalition look set to stand firm this time.