ITALY VOTES NO TO BERLUSCONI-ERA CONSTITUTIONAL

C O N F I D E N T I A L SECTION 01 OF 02 ROME 001880

SIPDIS

NOFORN
SIPDIS

E.O. 12958: DECL: 06/26/2016
TAGS: PGOV IT
SUBJECT: ITALY VOTES NO TO BERLUSCONI-ERA CONSTITUTIONAL
REFORM

REF: A. 05 ROME 3816

B. ROME 1879

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Classified By: Pol M/C David D. Pearce for reasons 1.4 (b) and (d).

SUMMARY
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1. (C) The controversial constitutional reform approved by
the Berlusconi-led majority last November was defeated
soundly in a public referendum by a surprisingly wide margin
of 61.3 percent to 38.7 percent countrywide. Voter turnout
was a high: 53.6 percent. The most well-known component of
the reform was "Devolution," essentially a Northern
League-proposed move toward federalism that the Prodi-led
government called an effort to split up the country and
further impoverish the South of Italy. Not surprisingly, the
vote was closer in the North than the South, and the northern
regions of Lombardy and Veneto actually voted in favor of the
reform. The referendum brings to a close Italy's extended
campaign marathon and should allow Prodi to focus on
governing. A shake out in the center-right is likely. END
SUMMARY.

REFERENDUM FAILS
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2. (U) The controversial constitutional reform approved by
the Berlusconi-led majority last November was defeated
soundly in a public referendum called for by now PM Romano
Prodi (REF A). The referendum failed by a surprisingly wide
margin of 61.3 percent to 38.7 percent countrywide. Voter
turnout reached a ten-year high for a referendum: 53.6
percent of Italians voted.

NORTH/SOUTH DIVIDE PERSISTS....TO AN EXTENT
--------------


3. (C) The center-left painted the Berlusconi-proposed reform
as an attempt to split up the country and to increase the
disparity of wealth between the North and the South. Though
it involved extensive reforms to several articles of the
constitution, the most well-known component was "Devolution,"
a relatively modest Northern League proposal to move Italy
toward a federal state.


4. (C) To be expected, opposition to the proposed reform was
stronger in the South where the referendum lost by a margin
of 74.8 percent to 25.2. The referendum also failed in the
North by a slimmer margin of 52.6 to 47.4 percent. A
Northern League spokesperson, however, pointed out to POLOFF
that the referendum passed in the northern regions of Veneto
and Lombardy, even if it failed in the major cities of Venice
and Milan.

POLITICAL IMPLICATIONS
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5. (C) The referendum brings to a close an extended campaign
season that began with parliamentary elections in April and
continued through key mayoral and provincial elections in
May. Senior Prodi adviser Ricardo Levi recently told
visiting EUR/WE Director that a defeat of the referendum
would be a strong defeat for Berlusconi (REF B). He
continued that Berlusconi would no longer be able to argue
that he actually won the parliamentary elections. Finally,
Levi pointed out that Prodi could stop worrying about
campaign results and begin governing since the next elections
are not until 2009.


6. (SBU) Politicians on the left have publicly called the
failed referendum a great success while recognizing the need
for a consensual approach to constitutional reform. Prodi
immediately called for the opposition to sit down and
negotiate with them, something even Berlusconi has said he
would consider. Other center-left leaders were more gloating
in their public comments than Prodi.


7. (C) Reaction within the center-right has been mixed. The
Northern League is disappointed, but Umberto Bossi took a
surprisingly muted tone and said he would stick with
Berlusconi and try again later. Some Northern League
proponents have blamed the South (including UDC and AN voters
there) for wanting to continue to live off the wealth of the
North. The UDC's Marco Follini has predictably called for
Berlusconi to step aside. The AN's Gianfranco Fini and UDC's
Pier Ferdinando Casini called for a period of reflection,
noting it is unfair to blame southern supporters of the

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center-right for the referendum's defeat. Berlusconi is
quoted as saying, "Now they will try to get rid of me,"
referring to the UDC and AN.

COMMENT
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8. (C) Italy's campaign marathon is over. After three
consecutive victories, the Prodi government is stronger than
the day it was formed, and Berlusconi has been soundly
defeated in a third electoral test in as many months. As a
result, Prodi can get to the business of governing. Senior
center-left leaders have told us this string of victories
would allow Prodi to rein in the increasingly boisterous
radical left-wing of his coalition and that the moderates of
the Daisy will finally raise their (until now) silent voices.
The proof will come in the coming days as the debate over
funding foreign missions abroad rages on. In any case, Prodi
will no longer have the excuse of elections.


9. (C) COMMENT CONT.: Berlusconi has lost, and his erstwhile
allies in the UDC and AN will likely try to move him aside.
The question is how quickly. Conditions inside Berlusconi's
own Forza Italia are no better, with multiple contacts
reporting that infighting has been raging behind the scenes
since the close defeat in the April 9-10 parliamentary
elections. However, given the relatively strong showing of
Forza Italia in the parliamentary elections and the
continuing campaign season, nobody dared to push too
forcefully. Now, with the elections over, the center-right
will begin a potentially painful period of "reflection," to
use the euphemism employed by some of its leaders. END
COMMENT.
SPOGLI