Jan. 20 (Bloomberg) -- Italian Prime Minister Silvio Berlusconi's handling of the nation's economy has been a ``disaster,'' his 2001 opponent said, signaling the issue will be central in the campaign for parliamentary elections on April 9.

The ``real disaster of the government is the economy,'' Francesco Rutelli said in debate late yesterday televised on Berlusconi-owned Mediaset SpA, the country's largest television network. ``Italians have woken up to the fact that the government made profound errors in economic policy.''

Five years ago, Berlusconi signed a ``contract'' with Italians, promising an economic miracle, lower taxes and 1 million new jobs. Since then, the economy has slipped twice into recession, its deficit and debt have swelled and the country ranks as the least competitive of the 12 euro nations, according to the World Economic Forum.

``We are not the last ones in Europe, there are many others that are worse off,'' Berlusconi said during the three-hour debate. The lira ``was sold off. I inherited this situation,'' said the prime minister, also Italy's richest person.

``The contract with Italians was betrayed and the promises were not kept,'' Rutelli said. The debate drew 3 million viewers, according to newspaper La Repubblica.

The growth rate of Italy, Europe's fourth-biggest economy, this year will trail the average of the dozen countries sharing the euro for the ninth year in 10, the European Commission forecasts. Its debt, the second-highest in Europe, this year will rise for the first time in a decade, the government projects. Italy's deficit breached a European Union limit of 3 percent in 2005 for the third year straight.

Polls

With 80 days until the election, which pits Berlusconi against former prime minister and European Commission president Romano Prodi, the economy is the top concern of voters, polls indicate.

Italians list job security, pensions, rising prices and taxes as the issues they want to see the prime minister address, a survey showed today. Simulation Intelligence Simera carried out the poll for Panorama magazine, interviewing 800 adults on Jan. 14-17. There was a margin of error of 3.5 percentage points.

Berlusconi five years ago refused to hold any one-to-one debates with Rutelli. Berlusconi's coalition secured the biggest majority in parliament since the end of World War II.

Rutelli, Rome's ex-mayor, is today leader of the Daisy party, one of the biggest groups in the nine-party Union coalition in opposition to Berlusconi's ruling House of Freedoms coalition. Prodi, who defeated Berlusconi in 1996, is the prime minister's center-left opponent this year.

Prodi

Rutelli said the recurrence of tax amnesties encouraged tax evasion and ``destroyed'' Italy's public accounts.

Berlusconi said he had inherited a bad economy and ``disadvantageous'' currency from Prodi. As prime minister between 1996 and 1998, Prodi slashed the deficit enough to clinch Italy a place in the single currency.

Prodi would defeat Berlusconi with 51 percent of the vote, compared with 46 percent for the ruling coalition, Trieste-based SWG Srl said today in a survey of 1,000 adults on Jan. 16. No margin of error was given. In a Jan. 5 SWG poll, Prodi led by just 1 percentage point. The polls were carried out for weekly Espresso magazine.

This year Berlusconi has tried to recoup his disadvantage in opinion polls by appearing regularly on television. He has spoken on air for more than three hours compared with Prodi's eight minutes, according to a study by Rome-based public relations agency Klaus Davi & Co.

To contact the reporter on this story: Flavia Krause-Jackson in Rome at fjackson@bloomberg.net.

Last Updated: January 21, 2006 06:46 EST