Bloomberg fights debt and Rudy's shadow

Michael Bloomberg's inaugural address yesterday as mayor of New York was a solemn affair, held on the steps of City Hall, less than half a mile from the devastated site of the World Trade Centre.

But the physical destruction of the towers and their occupant in September's terrorist attacks is just part of the burden facing the 59-year-old Republican, for he takes up his job at perhaps the most critical time in the city's modern history.

Its debts have soared since the attacks, and Mr Bloomberg said he would have to cut the staff by 20%. He urged other government agencies to do the same. New York is forecast to have a budget deficit of up to $4.8bn (£3.4bn) this year.

The outgoing mayor, Rudolph Giuliani, will continue to cast a powerful political shadow.

Mr Bloomberg's speech was his opportunity to assert a new identity. It may be a measure of his success that commentators expressed surprise that he used the event to make potentially unpopular statements about belt-tightening.

But the difficulty of keeping out of the departing mayor's shadow was evident as Mr Giuliani, who has won near legendary status for his humane and dignified leadership on and after September 11, received a standing ovation. Mr Bloomberg is expected to be a far less obvious presence than the man who became known as the "24-hour mayor".

He identified schools, public housing and the continuing reduction of crime as his priorities, but vowed that there would be no further tax increases.

"We have to do more with less," he said. "We cannot raise taxes, we must find another way. I will do my part to balance the budget. We will not be able to afford everything we want or everything we currently have."

He urged Washington to come up with the billions of dollars it promised in aid, and said partisan differences should be set aside.

He also called on corporate America not to abandon New York.

"New York is the best place to do business, and to our corporate leaders I urge you to strengthen your commitment to New York. This is no time to leave the big apple. New York is safe, strong and open for business."

The tone of the event was subdued: the party afterwards had little of Mr Bloomberg's customary glitz, offering the guests only sandwiches and biscuits.

There was a moment's silence for the victims of the terrorist attacks and Mr Bloomberg promised to do everything he could to honour them.

The speech was preceded on Monday by the oath of office, which Mr Bloomberg took before the city clerk, Victor Robles. The billionaire businessman handed over the traditional 15 cents: small change compared to the $69m he spent on his campaign.