Identifier
Created
Classification
Origin
07ROME362
2007-02-22 16:46:00
CONFIDENTIAL//NOFORN
Embassy Rome
Cable title:  

PRODI'S RESIGNATION AND NEXT STEPS FOR ITALY

Tags:  PGOV PREL IT 
pdf how-to read a cable
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TO RUEHC/SECSTATE WASHDC IMMEDIATE 7252
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE IMMEDIATE
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RUEHMIL/AMCONSUL MILAN IMMEDIATE 8376
RUEHNP/AMCONSUL NAPLES IMMEDIATE 2333
C O N F I D E N T I A L SECTION 01 OF 02 ROME 000362 

SIPDIS

NOFORN
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E.O. 12958: DECL: 02/22/2012
TAGS: PGOV PREL IT
SUBJECT: PRODI'S RESIGNATION AND NEXT STEPS FOR ITALY

REF: ROME 356

ROME 00000362 001.2 OF 002


Classified By: Political Minister Counselor David Pearce, for reasons 1
.4 (b)(d).

C O N F I D E N T I A L SECTION 01 OF 02 ROME 000362

SIPDIS

NOFORN
SIPDIS

E.O. 12958: DECL: 02/22/2012
TAGS: PGOV PREL IT
SUBJECT: PRODI'S RESIGNATION AND NEXT STEPS FOR ITALY

REF: ROME 356

ROME 00000362 001.2 OF 002


Classified By: Political Minister Counselor David Pearce, for reasons 1
.4 (b)(d).


1. (C/NF) President Napolitano is consulting
with political leaders to determine the government's
viability after it lost a key foreign policy
vote in the Senate. PM Prodi tendered his resignation
after the balloting, which the President accepted "with
reserve". The Senate loss followed a warning by
FM D'Alema to far left coalition members that the
government's should step down if it could not sustain
its own program. The way forward is unclear. Napolitano
is expected to conduct political consultations at least
to the end of the week, and possibly beyond, before making
any decisions. He could give Prodi another chance to prove
his Senate majority in a confidence vote that would enable
the government to limp along until the next crisis. Or he
could turn to someone else. One encouraging element,
however, is that most of the major players want to
move in the direction of greater stability in decision making.
If so, that would be bad news for the far left, and good news
for us. End summary.


Government Foreign Policy Motion Fails, PM Resigns
-------------- --------------


2. (U) On February 21, following a 158-160 defeat in the
Senate of a motion on his government's foreign policy
(Reftel),
PM Romano Prodi immediately offered his resignation to
President Napolitano. Napolitano accepted Prodi's
resignation "with reserve", i.e. provisionally, but asked
him to stay on as caretaker. Napolitano February 22 began
a series of constitutionally mandated consultations with
political leaders to determine the state of the government's
majority in Parliament. Napolitano was expected to conduct
the consultations at least to the end of the week, and
possibly
beyond, before making any decisions.


3. (C/NF) The nine-party Prodi coalition government had a
one-seat majority in the Senate, and it had been clear for
months that the far-left minority was exerting
pressure beyond its numbers on both domestic and foreign
policy. Prodi and FM D'Alema (as leader of DS, the largest

party in the coalition) have struggled to appease or
contain the far-left; this vote was D'Alema's attempt to
force the far-left to support the government's foreign
policy. In fact, the far-left party leaders (particularly
Refounded Communist leader Bertinotti and Communist
Party of Italy's Diliberto) did support the government.
But they could not control their "dissidents", two of whom
abstained.


4. (C/NF) Key issues in the foreign policy debate during
the runup to the vote included funding the continued Italian
force presence in Afghanistan and the government's approval
of a Berlusconi-era decision in favor of a project to build
additional facilities for the U.S. Army at Dal Molin airfield
in Vicenza. On both counts the Prodi government faced
strident
opposition from far-left members of its coalition.
Front-page
coverage of anti-Dal Molin demonstrations and the
Ambassador's
editorial (along with five other envoys) in favor of a
continued strong GOI mission in Afghanistan added to the mix.
Both Senator-for-life Giulio Andreotti (a former Christian
Democrat PM believed to reflect present Vatican views) and
Senator Sergio Pininfarina (identified with the center right
and big business) also abstained, dealing a surprise blow to
the government. The outcome led some discerning analysts
to espy a U.S.-Vatican-industrialists conspiracy.


5. (C/NF) In recent weeks, President Napolitano, a member
of FM D'Alema's Democrats of the Left (DS) party, had
publicly suggested that the government must prove it could
be self-sufficient (i.e., not need the votes of the
opposition) in conducting foreign policy. At the same
time, D'Alema repeatedly signaled his impatience with
far left parliamentary indiscipline. Before he left for his
recent Asia trip, D'Alema said "he hoped there would be a
government here when he returned." And just before the vote
he directly challenged the far-left, declaring that if the
government could not sustain its own motion on foreign policy,
it should "go home."

ROME 00000362 002.2 OF 002



Options
--------------


6. (C/NF) There are a number of possible outcomes to
the president's consultations, which we have ranked from
most to least likely:

(1) Napolitano sends Prodi back to the Senate to try
again to win a majority. This would require calling for a
general confidence vote, but yesterday's vote seriously
called into question the government's ability to control
both party dissidents and senators for life. The
government might squeak by, but it would be seriously
weakened, and vulnerable to another crisis.

(2) Napolitano gives Prodi another mandate to re-form
his government. Success of this scenario would require
Prodi to convince other centrist parties, like the Christian
Democratic Union (UDC),or individuals like independent
centrist Marco Follini, to expand the coalition's power
in the Senate. But given the already weakened state of the
coalition, it is not clear why others would want to jump
on a sinking ship.

(3) Napolitano gives a mandate to another member of
the center-left coalition. This could be D'Alema's chance
to supersede Prodi, but he would face the same electoral
math in the Senate where the coalition simply does not have
a dependable majority. D'Alema also faces anger from some
center-left colleagues who blame him for forcing this
crisis. Still, Berlusconi has made it clear he could work
with D'Alema, and there already are rumors that the
center-right could accept a D'Alema government of some
kind.

(4) Napolitano gives a mandate to former PMs Amato or
Dini, or Senate President Marini, to form a technical/
institutional government. This would require support of
the big parties (e.g., center-left DS and Daisy,
as well as center-right Forza Italia and Alleanza Nazionale).
This likely would be a short-lived government whose mandate
would be to tackle a few key reforms like the electoral
law, and to prepare for new elections. Historically,
technical
governments have degenerated in partisan feuding, however,
and
there is no clear agreement yet between the center-left and
center-right on the shape of a new electoral law.

(5) Napolitano calls for new elections, either for
the Senate only or for the entire Parliament. A
Senate-only vote is unlikely. If general elections were
held today, the center-right would probably win, which is
therefore a powerful incentive to the center-left parties
to try to make other options work instead. And, given
Napolitano's own center-left background, this outcome is
probably likely only if all else fails.

Comment
--------------


7. (C/NF) FM D'Alema was taunting the far left before the
February 21 foreign policy vote to either step in line with
the government or get ready to step down from power. While
he lost the vote, he went down defending a rational foreign
policy and remains the strongest center-left leader.
Analysts
here are divided over where Napolitano is most likely to come
out.
Many think he will give PM Prodi another chance to put
together a coherent governing majority. Others think the real
problem is the electoral law, and the only real fix to
government stasis is to reform it, which argues for an
interim technical government with outside support from the
major parties.


8. (C/NF) Since there are so many possible outcomes,
it is too early to hazard a guess on how the outcome
will affect various U.S. equities. One encouraging element,
however, is that most of the major players here seem to want
to
move in the direction of greater stability in decision making.
If so, that should be bad news for the far left, and good
news
for us.
SPOGLI