UPDATE 2-Italian unions to strike over coalition budget compromise
* Unions to hold half-day strikes till mid-November
* Call on parties to change budget in parliament
* Budget criticised by unions, employers, former PM Monti
ROME, Oct 21 (Reuters) - Italy's three main trade union confederations will hold strikes and protests against the government's 2014 budget plan, they said on Monday, piling more pressure on Enrico Letta's fragile coalition government.
Unions, employers and politicians from among the ruling parties have complained the budget does too little to reduce taxes, reverse years of austerity or reform an economy which has been in recession for two years.
The fiscal law, which aims to lower Italy's budget deficit to 2.5 percent of output in 2014 from a targeted 3.0 percent this year, has become a focal point of discontent against the unpopular left-right coalition government.
On Friday strikes against the budget by smaller left-wing unions hit transport, education and services and on Saturday demonstrators clashed with police as tens of thousands protested in Rome against austerity.
Luigi Angeletti, head of the moderate UIL union, said that to preserve his government's stability Letta had bowed to political vetoes from coalition partners which had blocked the bold spending cuts and tax reductions that had been promised.
"Everything stays the same, Letta shouldn't have done a budget to stabilise the government, he should have done one to stabilise the country," he told reporters after a meeting with the chiefs of the larger CISL and CGIL.
The unions called for major changes to the fiscal law during its passage through parliament, where it must be approved by the end of the year, but they stopped short of calling a nationwide general strike.
Instead they will hold half-day strikes among various categories of workers up to mid-November, when they will meet again to assess whether the government has responded to their demands and decide on future action.
Ruling parties on both sides of Letta's coalition of former rivals have promised to change the budget, prompting a warning from head of state Giorgio Napolitano that amendments must not flout Italy's public finance commitments to the European Union.
While Angeletti and CISL head Raffaele Bonanni demanded more cuts to wasteful public spending, leader of the left-wing CGIL Susanna Camusso called on Letta to raise levies on income from financial investment and cut taxes for workers and pensioners.
The small right-wing UGL union also announced its members would hold four-hour strikes like the larger unions.
Former Prime Minister Mario Monti joined the chorus of criticism over the weekend, accusing Letta of undoing the good work of his government and being "on its knees" before the policy diktats of Silvio Berlusconi's centre-right.