(ANSA) - Rome, March 11 - Italian Premier Silvio Berlusconi on Thursday was upbeat about the economy saying that a recovery, while slow, was in the works.

"After pulling out of a deep crisis, we are beginning to rise. This recovery will not be fast and the numbers won't be big, but the trend is upwards," the premier said.

Looking back at the economic downturn, Berlusconi recalled that "the government, when it tried to spread optimism, did not have its eyes closed but knew the importance of the psychological factor. We need to exploit this optimism".

According to the premier, the fact that carmakers like Fiat did not insist on having last year's 'cash-for-clunkers' initiative extended to 2010 "is a sign that the situation is getting better".

Berlusconi made his remarks at the presentation of a plan to create a Banca del Sud, bank for the south, to help finance development projects in Italy's economically depressed south, the so-called Mezzogiorno.

Also on hand was Treasury Minister Giulio Tremonti who said that as soon as the new bank opened a branch he intended to be the first person to open an account there.

Berlusconi added that if this were the case, he would be the second to do so.

The most recent data on the Italian economy indicates that the recovery is struggling to get going with GDP in the last quarter of 2009 falling 0.3% over the previous three-month period, after climbing 0.6% in the third quarter over the second and reversing a negative five-quarter trend.

National statistics bureau Istat on Wednesday again revised its data for the Italian economy in 2009 and said GDP fell by 5.1%.

Istat had initially put the decline in GDP at 4.9% and then on March 1 revised this to 5%.

NEW BANK TO OFFER CREDIT FOR SOUTHERN DEVELOPMENT PROJECTS.

The Banca del Sud will not be a retail bank with branches open to the public but operate as a so-called 'second level' bank which will coordinate medium and long-term credit through other banks. The credit will be channeled for projects aimed at creating new businesses, encouraging young and female entrepreneurs, allowing small and medium-sized enterprises (SMEs) to grow and expand abroad, investing in research and development and creating more jobs in the Mezzogiorno. This new network of existing banks, the Treasury explained, will only focus on coordinating credit for specific projects and not deal with other problems which typically affect the Mezzogiorno, like the lack of infrastructures and inefficient public services. However, Berlusconi said at the presentation, the State does intend to turn to the new bank to raise funds for major public works projects. The Banca del Sud will be a private bank although the State will hold a minority stake and make a symbolic financial investment. However, the state will sell its interest in the bank after its initial five-year development period has ended. Aside from making funds available for development projects, the Banca del Sud will also serve as a consulting agency for banks in its network and SMEs and will carry out evaluations of the various projects.

The 15-member organising commission has been tasked with selecting the new bank's founding members, defining the bank's governance, setting the minimum capital investment network members must contribute and defining their specific functions and activities. The founding members will include the Italian Postal Service and the 111 banks belonging to the Banche di Credito Cooperativo and Casse Rurali located in the south, for a total of 620 branches. The organising commission will be advised by a panel of representatives from Italy's national organizations and unions representing industrial employers (Confindustria), artisans (Confartigianato), retailers (Confcommercio), retail services (Confesercenti, farmers (Coldiretti), farm cooperatives (Lega delle Cooperative), farm owners (Confagricolture) and chambers of commerce (Unioncamere), among others.