“I BLAME Berlusconi and the euro,” a woman in a fur coat said as she rummaged among the cut-price sweaters at a market stall near St Peter’s. “Prices have doubled since the euro came in. We are the new poor.”

About 24 million Italians say that they now shop at market stalls at least once a week as they struggle, as they put it, “to reach the end of the month”.

In Via Condotti, the Bond Street of Rome, many of the big brand-name stores are deserted apart from Japanese and other tourists.

“The Italian middle classes are suffering from alarming impoverishment,” Il Messaggero said in a front-page report yesterday. “Luxury items are the first to go.”

Today Italy will suffer a half- day general strike, the latest symptom of growing protests over low growth and high taxes since Silvio Berlusconi’s coalition of the Centre Right took power in 2001. A full-day general strike is due next month.

At the same time Romano Prodi has made his return as leader of the opposition Centre Left, after five years as European Commission President, holding a council of war with fellow left-wing leaders.

It was Signor Prodi who took Italy into the eurozone, but Il Professore is still admired for his international status and he is a serious threat to a Prime Minister who has so far failed to fulfil his election promise to revive the economy.

Yesterday Enrco Letta, a Prodi aide, predicted that Signor Berlusconi would hold a snap election next spring rather than wait until his term ends in 2006. “If he waits any longer, Italians will see even more clearly that his tax reforms favour the super-rich and that the tax cuts can be paid for only by public spending cuts and an even bigger budget deficit,” he said.

Signor Berlusconi pushed through €6 billion (£4.21 billion) of income tax cuts last week, but a survey by Confesercenti, the Italian small businesses’ association, yesterday showed that more than half of Italians believed that they would be even poorer next year.

“No one believes in miracles any more,” Marco Venturi, the head of Confesercenti, said. “These past two or three years have taught people to buy more wisely.” He said that Italians would use their end-of-year bonus to buy essential items that they had put off all year, such as clothing and shoes.

Adusbef, the consumer association for banking and financial services, said: “This will be the hardest Christmas since the Second World War.” La Repubblica has offered readers a guide to doing it on the cheap, suggesting holidays with no-frills airlines, house swaps, meals with tap water.

Back in Via Condotti, the fashion designer Laura Biagiotti said: “Our message this Christmas is that you can give little presents without bankrupting yourself. We have designed lots of affordable items between €60 and €100.”

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