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By Gavin Jones
ROME, Feb 19 (Reuters) - Italians go to the polls on Sunday and Monday to elect a successor to Mario Monti's technocrat government, with the main parties seeking new ways to win over almost a third of voters who are still undecided.
Final polls published on Feb. 8 before a two week black-out gave Pier Luigi Bersani's centre left a lead of 5.7 points over Silvio Berlusconi's centre right, which had been steadily closing the gap for several weeks.
Monti's centrist alliance was running a distant fourth behind the anti-establishment 5-Star Movement of comedian Beppe Grillo. However, Grillo says he will remain in opposition, meaning Italians face a three-way choice to run the country between Bersani, Berlusconi and Monti.
Bersani has sought to defend his lead with a low-risk, non-committal strategy with few specific proposals. He leads a broad church spanning economic liberals and Keynesians and any strong stance from the leader risks fomenting internal dissent.
Berlusconi promises sweeping tax cuts, asset sales and spending reductions while Monti, struggling to close the gap in the polls, has tried to shed his image of austerity and has himself made increasingly ambitious promises to cut taxes.
Following are the policy positions of the main coalitions in three areas which have dominated the election campaign:
BERSANI - Largely avoids tax cutting promises but says would aim to lower payroll taxes on companies and workers while hiking taxes on "large financial wealth and property". Would exempt people with small houses from paying the unpopular IMU housing tax on primary residences, while increasing IMU on large homes.
Would invest 7.5 billion euros in three years in schools and hospitals. Says will "restructure" the public sector, rather than cut spending.
BERLUSCONI - Immediately scrap IMU on primary residences, cancel an increase in sales tax due to take effect in July, reduce the overall tax burden by 1 percentage point per year, gradually abolish company tax IRAP over five years, scrap taxation of corporate profits if they are re-invested.
Would slash spending by 80 bln euros in five years.
Massive asset sales to cut the public debt which would reduce interest spending. Would cut waste and halve the cost of Italy's bloated political apparatus.
As price for a electoral pact with his ally the Northern League, also promises 75 percent of all taxes raised in the rich and populous Lombardy region, a League stronghold, will be spent locally.
MONTI - Promises "a progressive reduction of income tax, starting with low tax brackets", resulting in a 15 bln euro reduction after five years. Would also cut IRAP by 11 bln euros over the same period. Would cut IMU on owners of small houses by 2.5 bln euros, and pledges that all revenue from the fight against tax evasion will be used to lower tax rates.
Would cut spending by 4 percentage points to 39 percent of output over five years by more efficient purchasing by central and local government, cutting the political apparatus and cutting health spending.
Would increase spending on education by 8 bln euros over five years.
BERSANI - Will not unilaterally change Monti's goal of keeping a balanced budget but will lobby Italy's partners to exclude some public investments from deficit calculations. Says best way to cut debt is to boost growth and any proceeds from asset sales should be used for this goal. Makes no specific pledges on revenue from asset sales.
The programme of Bersani's Democratic Party (PD) calls for "an end to the dogma of austerity and balanced budgets as a goal in itself, without any attention to jobs, investment, research or education".
It is unclear on what it will do to boost growth if its European partners say no to recalculating the deficit.
BERLUSCONI - Committed to maintaining a balanced budget but also wants public investments stripped from deficit calculations. Says public debt can be slashed by 5 percentage points, or around 80 billion euros, per year by selling public companies and real estate.
His programme, like the PD's, calls for an end of EU-driven fiscal policy based "solely on austerity".
MONTI - Committed to a balanced budget with fewer caveats than the other two, though would also like to see the EU offer some leeway on public investments. Says asset sales can cut the debt by 130 bln euros over five years.
BERSANI - Would aim to lower taxation on permanent contracts to reduce recourse to temporary ones; increase worker representation in the workplace; offer tax breaks for firms that hire women, especially in the south; and increase the number of nursery schools to encourage female employment. Would not change hiring and firing rules.
BERLUSCONI - Would exempt companies from paying payroll taxes on new hires of young employees for five years, cut red tape for companies and substitute the current system of state subsidies to companies with cuts in payroll and corporate taxes.
MONTI - Pledges more ambitious labour reform than the one passed by his government last year, which he says was hamstrung by the centre left. Proposes new type of contract for new hires which would be open-ended rather than temporary, but would entail lower costs for companies and less firing restrictions.
Would drastically simplify labour laws to encourage foreign investment, increase role of training and apprenticeships, and take more steps to reduce protection for regular workers while giving more rights to those on temporary contracts.
Would also offer tax breaks for firms hiring women and people under the age of 30. (Editing by Alison Williams)