* Napolitano warns of risk of violent unrest
* President calls for measures to help economy
* Third of people risk poverty or social exclusion-study
By Naomi O'Leary
ROME, Dec 16 (Reuters) - President Giorgio Napolitano warned on Monday that Italy could be plunged into violent social unrest unless the government swiftly introduced reforms to help struggling citizens, following a week of protests in cities across the country.
With the highest debt burden in the euro zone after Greece, Italy - mired in its longest post-war recession - is closely watched by financial markets and European partners as a flashpoint for instability in the bloc.
Thousands of Italians have marched over the last week in protests fuelled by falling incomes, unemployment above 12 percent and over 40 percent among people below 25, and graft and scandals among politicians widely seen as serving their own rather than the country's interests.
Though the role of president is usually regarded as largely ceremonial, Napolitano has been forced to intervene several times to exhort squabbling politicians to set aside their differences and agree on reforms to address the crisis.
In an address at his presidential palace in Rome, Napolitano warned that struggling citizens "could get involved in haphazard and even violent protests, in an extreme and unfruitful surge of total opposition to politics and institutions".
"The recession is still biting ... we need strong measures beyond those approved by the government and the parliament this year and the last," he said, without elaborating.
Over the weekend a fringe far-right group tore down the EU flag in an assault on the European Commission's Rome quarters, reflecting anger at Europe, which some blame for years of austerity and economic hardship.
"The crisis affecting the euro zone has put a strain on social cohesion. The most detailed forecasts for 2014 indicate a risk of widespread social tension and unrest: a risk that must been kept in mind and confronted in Italy," Napolitano said.
POVERTY RISK
The president's warning was underlined by data from national statistics office Istat on Monday which showed a third of people living in Italy risk poverty or social exclusion.
The study, which combined data on the risk of poverty, severe material hardship or low levels of work, found 29.9 percent of the population were in at least one of the three categories, compared with a European average of 24.8 percent.
Just over 21 percent were not able to heat their homes adequately, up from 18 percent in 2011.
Napolitano, 88, seen as the guarantor of the coalition government since he reluctantly agreed to serve a second term to solve a political stalemate in April, warned his mandate was limited and that he would step down at a future point.
Attempts to push through much-needed reforms have been held up by coalition infighting. But Prime Minister Enrico Letta was bolstered by winning a confidence vote last week and has vowed to push through legislation, starting with a change to an electoral law declared unconstitutional by Italy's top court.
In a barb aimed at centre-right leader Silvio Berlusconi, who defiantly protested his expulsion from the Senate for tax fraud last month as the result of a judicial conspiracy, Napolitano said no one should "evoke imaginary coups d'etat".
Berlusconi pulled his Forza Italia party out of the ruling coalition last month, but the government survived with the support of rebels who broke off to form their own party.
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