Premier Romano Prodi wrapped up for the summer on Friday on an optimistic note, saying his 11-week-old government had already begun putting Italy back on its feet.
"In these first 80 days, we've started to set Italy moving. We've worked hard and ignored those who predicted our imminent end," said the centre-left leader, who won the narrowest of victories against Silvio Berlusconi in the April general election.
"We've shown we have the courage to change this country and that we will succeed in doing it," Prodi told reporters at a press conference.
On the foreign policy front, the premier said his government had stuck to its campaign promise to withdraw Italian troops from Iraq, a process that will be completed by the end of the year.
He said it had also ensured that Italy continued its peacekeeping missions abroad, particularly in Afghanistan, and had taken a high-profile role in efforts to bring about a ceasefire between Israel and Lebanese militant group Hezbollah.
"All this has returned Italy to the role of a main player in Europe and the world," said the former European Commission chief.
On the domestic front, the premier highlighted approval of a wide-ranging deregulation decree aimed at ending anti-competitive practices in several protected fields and a fiscal reform measure which he said would help fight tax dodging.
He said the 2007 budget included a key pledge to cut the payroll taxes and social security contributions paid by businesses and workers by 5%. The budget was definitively approved on Thursday via a confidence vote in one of the parliament's last acts before the summer break.
Prodi also defended a controversial prisoner amnesty under which some 20,000 inmates will be released from Italy's chronically overcrowded jails.
"This measure was an urgent one needed to prevent the already serious prison situation getting any worse," he said. Critics have expressed concern that the freed prisoners will reoffend and represent a threat to the community.
A minister in Prodi's own cabinet, Antonio Di Pietro, fiercely fought the amnesty after it was extended to white-collar crimes to ensure the support of Berlusconi's Forza Italia party.
Amnesty measures require the approval of two-thirds of parliament and so without opposition support, the measure would have sunk.
Prodi concluded his press conference by wishing everyone a happy holiday, saying that "we certainly need and deserve one".
Despite Prodi's upbeat tone, the government has seen a rocky start to its five-year legislature.
The premier's nine-party coalition ranges from Communists to Catholics and Prodi has had difficulty in maintaining alliance unity on most of the major policy issues he has so far tackled.
Unity is crucial for the premier because of his weak majority - his government hangs by a thread in the Senate where it holds only two more seats than Berlusconi. Last week, the government was forced to put a measure ensuring the refunding of Italy's peacekeeping mission to Afghanistan to a confidence vote in the Senate after rebel pacifists threatened to vote against it.
The mass prisoner release also turned into a headache for Prodi after Infrastructure Minister and former anti-graft prosecutor Di Pietro crossed swords with Justice Minister and amnesty supporter Clemente Mastella, with both ministers threatening to resign.
Since Di Pietro heads the Italy of Values party and Mastella the Catholic, centrist UDEUR party, the loss of either minister could have toppled Prodi.
The government has resorted to confidence votes to push measures through a total of nine times already, seven of them in the Senate. If the government loses such a ballot, it is forced to resign.
The opposition says the repeated use of do-or-die votes is a sign of the fragility of Prodi's government as well as an abuse of parliamentary procedures.
It says it shows the government is not self-sufficient and unable to hold its coalition together.
But Dario Franceschini, a top member of the centre-left Daisy party, accused the opposition of hypocrisy, saying it had used confidence votes 46 times when it was in power. He conceded there had been an "anomalous use" of confidence votes by the new government but argued that it was mainly due to opposition filibustering.
"They're trying to stop us governing and this is a defensive measures," Franceschini said in an interview published in La Repubblica daily.
He insisted the Afghanistan Senate vote was the only case in which the government had resorted to a confidence vote because of internal reasons.
