Identifier
Created
Classification
Origin
07ROME2258
2007-10-29 11:04:00
CONFIDENTIAL//NOFORN
Embassy Rome
Cable title:  

ITALY: LOOKING BEYOND PRODI WHILE ENGAGING HIM

Tags:  PGOV PREL IT 
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PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHRO #2258/01 3021104
ZNY CCCCC ZZH
P 291104Z OCT 07
FM AMEMBASSY ROME
TO RUEHC/SECSTATE WASHDC PRIORITY 9316
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHFL/AMCONSUL FLORENCE 2731
RUEHMIL/AMCONSUL MILAN 9062
RUEHNP/AMCONSUL NAPLES 2875
C O N F I D E N T I A L SECTION 01 OF 02 ROME 002258 

SIPDIS

NOFORN
SIPDIS

E.O. 12958: DECL: 10/25/2017
TAGS: PGOV PREL IT
SUBJECT: ITALY: LOOKING BEYOND PRODI WHILE ENGAGING HIM

REF: A. ROME DAILY REPORT (10/26/2007)


B. ROME DAILY REPORT (10/22/2007)

C. ROME 2093

ROME 00002258 001.2 OF 002


Classified By: Ambassador Ronald P. Spogli for reasons 1.4 (b) and (d).

SUMMARY
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C O N F I D E N T I A L SECTION 01 OF 02 ROME 002258

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NOFORN
SIPDIS

E.O. 12958: DECL: 10/25/2017
TAGS: PGOV PREL IT
SUBJECT: ITALY: LOOKING BEYOND PRODI WHILE ENGAGING HIM

REF: A. ROME DAILY REPORT (10/26/2007)


B. ROME DAILY REPORT (10/22/2007)

C. ROME 2093

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Classified By: Ambassador Ronald P. Spogli for reasons 1.4 (b) and (d).

SUMMARY
--------------


1. (C/NF) After the center right defeated Prodi's governing
majority October 25 on seven fiscal bill amendments in the
Senate, Prodi scraped together enough votes to pass the main
piece of legislation at 1:04 a.m. With additional coalition
allies threatening to drop Prodi daily, the political debate
has moved from whether Prodi will survive to what kind of
government will replace him. A survivor, Prodi could still
manage to hold on through mid-2008, but politicians are
debating the merits of immediate elections, caretaker
governments and electoral reform. With GoI attention focused
on domestic survival, pressing forward on common strategic
objectives could become increasingly difficult, and continued
senior-level engagement will become even more necessary to
keep the GoI focused. END SUMMARY.

STALEMATE MOVES TO CHECK
--------------


2. (C/NF) On October 25, PM Prodi's governing majority "went
under" in voting on seven amendments to a fiscal bill forming
part of the overall budget package. One amendment united the
radical left with the center-right opposition to pass an
alternative minimum tax-like proposal that would cost 5
billion euros annually. However, the underlying fiscal bill
was ultimately passed at 1:04 AM (REF A). A FI Deputy told
Poloff that unhappy coalition members were sending Prodi the
message they could bring him down, but that they were
ultimately not ready to do so, just yet.


3. (C/NF) The Senate is currently scheduled to conclude
voting on the various budget bills by November 14 (REF B).
Contacts in the Senate told Poloff that Prodi will likely
attach portions of the budget legislation to a confidence
vote in order to enforce coalition discipline. Failure to
pass such a vote would force Prodi to submit his resignation
to President Napolitano.

AFTER WEEKS OF COALITION INFIGHTING
--------------



4. (C/NF) The failed votes came after weeks of acrimonious
intra-coalition fighting, especially between Minister of
Justice Clemente Mastella (UDEUR) and Minister of
Infrastructure Antonio Di Pietro (IdV). Forza Italia Deputy
Michaela Biancofiore also confirmed to Poloff rumors that
former PM Silvio Berlusconi has reached a deal with three
senators from the center-left South Tyrol People's Party
(SVP),though she cautioned they could always be "bought
back" by Prodi. The SVP Senators potentially join an
expanding list of moderate former-Daisy Senators reportedly
ready to abandon Prodi (REF C).

GOVERNMENTS FALL INTO PRE-ARRANGED PIECES
--------------


5. (C/NF) Talk of the Prodi government's collapse began
before it took office. However, a Communist Renewal (RC)
party official told Poloff in September that "politicians do
not take a leap in the dark," meaning the Prodi government
will stand until the groundwork for an alternative government
has been laid. In recent weeks, the political debate shifted
subtly from whether the Prodi government will fall to what
will happen when the government falls. The after-Prodi
debate is generally accompanied by a discussion of electoral
reform, which most agree is necessary as a potential antidote
to Italy's fragmented political scene.


6. (C/NF) Following are the most frequently discussed
scenarios:

Prodi government holds: Prodi has shown an uncanny ability
to avoid political checkmate (REF C). Many still consider it
likely that Prodi will survive the budget debate but believe
his government will collapse sometime in 2008. In 1994, the
Northern League withdrew support from the first Berlusconi
government but did not actually bring him down until the
following January, after the budget had been approved.

Immediate elections: Immediate elections are unlikely, and
most analysts believe the soonest elections could be held is

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March 2008. President Napolitano has repeatedly said he
would not call new elections absent electoral reform.

Prodi Caretaker: After the government falls, Napolitano
could invite Prodi to continue in a caretaker capacity until
early 2008 elections are held. This would allow Prodi to
pass the budget with support from the center right and
possibly negotiate electoral reform.

Technical/Institutional Government: Even RC leader Fausto
Bertinotti has recently opened to the idea of a technical or
institutional government taking the reigns from Prodi as when
Lamberto Dini replaced Berlusconi in 1995 or Giuliano Amato
replaced Massimo D'Alema in 2000. Senate President Marini
and Dini are frequently mentioned as possible candidates to
lead an institutional government though other options are
possible. Talk of a German-style grand coalition has all but
disappeared.

COMMENT
--------------


7. (C/NF) In the chess game of Italian politics, Prodi has
moved from stalemate into check, and he is struggling to
avoid checkmate. As a result, the Prodi government could
find it difficult to concentrate on some difficult foreign
policy challenges. In this environment, continued
senior-level engagement on common strategic objectives could
become even more necessary to keep the GoI focused on key
foreign policy challenges. END COMMENT.
SPOGLI