Identifier
Created
Classification
Origin
04ROME2815
2004-07-20 15:12:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Rome
Cable title:  

ITALY: AN INTERLUDE IN THE UNENDING GOVERNMENT

Tags:  PGOV PREL IT ITALIAN POLITICS 
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UNCLAS ROME 002815 

SIPDIS


SENSITIVE

E.O. 12958: N/A
TAGS: PGOV PREL IT ITALIAN POLITICS
SUBJECT: ITALY: AN INTERLUDE IN THE UNENDING GOVERNMENT
REVIEW

REF: A) ROME 2630, B) ROME 2280

SENSITIVE BUT UNCLASSIFIED; NOT FOR INTERNET DISTRIBUTION.

-------------------
SUMMARY AND COMMENT
-------------------
UNCLAS ROME 002815

SIPDIS


SENSITIVE

E.O. 12958: N/A
TAGS: PGOV PREL IT ITALIAN POLITICS
SUBJECT: ITALY: AN INTERLUDE IN THE UNENDING GOVERNMENT
REVIEW

REF: A) ROME 2630, B) ROME 2280

SENSITIVE BUT UNCLASSIFIED; NOT FOR INTERNET DISTRIBUTION.

--------------
SUMMARY AND COMMENT
--------------

1. (SBU) Italy's governing coalition may have reached a
moment of respite from disagreements, which have plagued it
since the spring elections. The interlude may not endure
long, but as one contact joked, "Berlusconi would certainly
make history if his were the first government to fall during
summer vacation." The unwillingness of the leaders of the
coalition partners to assume actual positions of power
within the Government is indicative of their intent to
maintain a distinct image and their right to voice dissent,
thereby seeking to enhance their standing before their own
electorate. (Prime Minister Berlusconi may occasionally
wish he had the same luxury of standing on the outside
calculating where to gain the greatest advantage.)


2. (SBU) It is a somewhat gloomy picture for an ambitious
prime minister, but the Government is intact, and indeed
ministerial changes were few. Those willing to bet that the
coalition will last until 2006 are fewer than before, and
more analysts contemplate the possibility of national
elections tacked onto the 2005 regional vote. But many
remain convinced that this Government will stick together
for its full term, whether because some parties (Northern
League on the right, and probably most of the opposition,
despite its current swagger) are unready to go to the polls;
because Berlusconi is determined to make history by leading
the first post-war government to serve a full term; or out
of a sense of responsibility to its electorate. On issues
of greatest importance to the U.S. -- chiefly support for
Iraq reconstruction -- we expect no diminished support from
this ally. On issues vital to Italy's own future, however,
decision-making may be slow and tortured -- or simply
inevitably postponed. END SUMMARY AND COMMENT.

--------------
THE CENTER-RIGHT'S UNENDING VERIFICA
--------------

3. (SBU) The July 16 appointment of technocrat Domenico
Siniscalco to replace Giulio Tremonti as Finance Minister
(septel),and the expected announcement that Northern League
Coordinator Roberto Calderoli will become Minister of Reform
after League leader Umberto Bossi's resignation, bring a
truce to the battle over "internal review" in the Berlusconi

Government in the wake of June elections. We would not
suggest that the "verifica" is over; we rather expect it to
be the permanent state of being for the remainder of this
Government. However, we do not for the time being foresee
further ministerial changes.


4. (SBU) The government partners who gained the most (in
relative terms) in the recent elections, National Alliance
(AN) and Union of Christian Democrats of the Center (UDC),
had the chance to obtain major positions of power in the
government, with AN President Fini apparently in line for
the Finance Ministry and UDC Secretary Follini reportedly
offered virtually any ministry he wanted. Instead, both
leaders remain "outside," part of the government, but not
heading a ministry that would tie them directly to its
policies -- making perennial carping an easier option.
Northern League (Lega) Secretary Bossi, either in disgust at
his partners' "betrayal" of federalist reforms he favors or
due to ongoing illness and weakness, has joined them,
leaving his position as Minister for Reforms in order to
assume a seat in the European Parliament. (COMMENT: We
tend to think Bossi's resignation was prompted primarily by
his illness, but the party took advantage of the
announcement to drive home a point to AN and UDC. Likewise,
Lega leaders were probably politically reticent to tell
voters that Bossi was too weak to continue serving in the
Government. A final calculation may consider that the
League's cherished devolution program is facing perhaps its
final crunch, and the party needs a strong, active leader to
manage the program to conclusion. END COMMENT.)

--------------
WHY REJECT POLITICAL SPOILS?
--------------

5. (SBU) It is the complaint and review process that
serves the smaller coalition partners, more than "winning"
an argument. Italy's parties are positioning themselves for
the next elections (whether held separately or
simultaneously). Both regional and national elections favor
coalition building, as the more parties in a coalition, the


more votes that coalition receives. To retain its
electorate, a party must remain visible and distinguish
itself from both its partners and its competitors.
Criticism, even of its own Government's programs, provides
visibility for party leaders. It is one way to convince
voters that their party, and their party's leader, count in
the government and are bringing them tangible benefits.


6. (SBU) Fini gained a great deal from the maneuvering.
He got rid of Tremonti, who pushed programs which at best
did not help AN's electoral appeal, and in some cases may
have hurt the party's standing. (AN has a strong populist
faction that relies on government employment and benefits.)
With Tremonti sidelined and Bossi physically weakened, Fini
perhaps shaped a "Fini-Berlusconi Axis" to replace the
"Northern Triangle" of Berlusconi-Bossi-Tremonti, gaining a
more visible role in the process and ensuring (at least for
now) that Berlusconi will consult him before making
important decisions.


7. (SBU) Follini, for all his recalcitrance, seemingly
gained little from his stalling. He may have overplayed his
hand, but we speculate that he never intended to accept a
government ministry. His goal all along was to prove
himself to his electorate and gain visibility. He also
wanted to remind Berlusconi and his other Government
partners not to take his small centrist party for granted.
His eventual rejection of the European Parliament seat he
won in the elections tends to confirm his intention of
remaining the semi-loyal ally, quick to criticize government
policies, but not prepared to quit the coalition.


8. (SBU) A more sinister theory suggests a Fini-Follini
axis to weaken Berlusconi in the run-up to the next
elections, paving the way for a different coalition. Such a
plan, however, bumps into problems of both numbers and
compatibility. Berlusconi and his Forza Italia (FI) are the
bridge between AN and UDC, which come from very different
backgrounds even if their approaches occasionally align. If
one assumes FI would evaporate without Berlusconi --
possible, but not guaranteed -- then FI voters would indeed
likely gravitate toward these two parties, as did center-
right protest votes in the last elections. But a center-
right coalition without the Berlusconi glue would be tenuous
at best; neither Fini nor Follini (nor any other center-
right leader currently on the horizon) yet demonstrates
Berlusconi's charisma and authority. Finally, the dream of
a "true center" of UDC and other former Christian Democrats
remains mathematically unlikely without significant changes
to Italy's electoral law.

--------------
WHERE IS THE GOVERNMENT NOW?
--------------

9. (SBU) The Government remains, with all partners
continuing to swear allegiance. None was willing to push to
the brink and create a true government crisis (contrary to
opposition declarations),although all, to some degree, have
contributed to an image of an emasculated coalition limping
through to an end, whether after five years or sooner.
Berlusconi remains strong enough, and indeed the only one
strong enough, to keep the allies together, although his
partners have gone to great lengths to prove to him that he
needs them as much as they need him. On international
policies, particularly those like Iraqi support of greatest
importance to the U.S., we expect little change. On
domestic policy, however, the Government faces a tough road.
It must pass some kind of economic reform to have any hope
of maintaining its (joint) electorate, but with each partner
angling to protect its own vested interests, compromise to
reach a meaningful end is unlikely, whether on devolution of
power to the regions, tax and spending cuts, or pension
reform. Lots of bickering and policies achieving only the
lowest common denominator seem the most likely outcomes.

--------------
FINAL COMMENT
--------------

10. (SBU) To win elections, and more importantly, to form
a government, Italian parties have to create coalitions that
can run a campaign with some degree of unity. The center-
right is showing anything but and has damaged itself
significantly -- if not yet irrevocably -- in the process.
Partners should be aware that, outside a coalition, they
have everything to lose and nothing to gain; the League's
own experience stands as example. For now, however, the
opposition center-left (with the luxury of being out of
power) appears more unified and coherent than the center-
right.


SEMBLER


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2004ROME02815 - Classification: UNCLASSIFIED