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The US ambassador in Rome on Thursday launched a ferocious attack on obstacles to foreign investment in Italy, linking the country’s attitude to outsiders to the poor performance of its economy.

Ronald Spogli’s comments came days after AT&T walked away from a deal on Telecom Italia and while Italian government interference in business is under intense scrutiny in Brussels. In a letter to Corriere della Sera, one of Italy’s most respected newspapers, the ambassador said: “You should concentrate less on who wants to invest and more on the fact that Italy is last in Europe in terms of economic growth.”

He said barriers were “often erected in the way of foreign investors” in Italy, noting the country’s relatively low levels of foreign investment. “These numbers should cause some reflection. Investments are not made where they are not welcome, where the rules of the market can be changed continuously.”

Mr Spogli’s harsh words followed the expressed wish of Romano Prodi, Italian prime minister, that Telecom Italia stay in Italian hands.

AT&T and America Movil of Mexico were discussing buying part of a controlling stake in TI from Pirelli, the tyre group, but AT&T quit the talks this week, saying there were “regulatory uncertainties”. Government ministers had started to quicken reforms to telecoms regulation and a break-up of some of TI’s business.

Pirelli has already failed to sell some of its shares to Rupert Murdoch’s business interests and to Telefonica of Spain. Last year Abertis of Spain and Italy’s Autostrade blamed the collapse of their agreed merger on a huge review of industry’s rules announced by the Prodi government.

Mr Spogli stressed he did not know the details of the TI talks but that AT&T’s fear of unpredictable rules was understandable and a view that “the majority of Italians would share”.

On Thursday Silvio Berlusconi, the media magnate, former Italian prime minister and arch enemy of Mr Prodi, managed both to side with the government and increase its discomfort. He said he would be willing to join other investors to “maintain the Italian identity” of TI. Mediaset, Mr Berlusconi’s group, has expressed an interest in TI many times but would face considerable political and competition barriers to taking a stake.

Earlier in the week Mr Spogli was reported to have talked critically about the strong presence of Italian government in business. But Mr Prodi told journalists while on a tour of Asia that he had been assured by the ambassador that his words had been misinterpreted.

There was no room for misunderstanding in Mr Spogli’s stinging attack on Thursday on Italy’s sluggish economy and the role that foreign investment could play.

On Thursday the Italian foreign ministry said it would “not be generous to interpret the Italian government’s initiatives as moves to obstruct foreign investment. Italy’s prime interest is to attract investment”.

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