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Prodisconia



Italy is suffering from a new disease caused by the coabitazione of incoming premier Prodi and outgoing one Berlusconi, the prodisconia. Strangely, Mr. Berlusconi would have won the elections with a comfortable majority in both houses, had he not changed the election law. It was the new election mode which, contrary to his expectation, favored the opposition. Interesting fact: the three million Italians living abroad who, for the first time, were given the right to vote, preferred Mr. Prodi, perhaps because they were only marginally exposed to Mr. Berlusconi's television power.

Besides the effect of the new election law, most observers were still surprised by Mr. Berlusconi's strong showing. After the detailed results came in, analysts were checking where the losing center-right coalition had had its strongest support. Some observers had expected the southern provinces and the islands where vote buying and influence peddling are rife, to support Berlusconi.

But surprise, surprise: it was the northern industrial belt between Turin and Trieste where 60 percent of Italy's GDP is created which provided Mr. Berlusconi's coalition with a 53 percent majority. In Lombardy and Venetia even 57 percent of the electorate voted center-right. A closer look revealed that industrial blue-collar workers voted in some places up to 80 percent for Berlusconi whereas enterpreneurs and white-collar staff often preferred the center-left opposition.

Why would workers vote conservative? Mr. Berlusconi's media power and his origins in Milan certainly provide part of the answer. But there are other reasons. The northern labor force is well paid and afraid that the economic and social reforms which the new government is expected to undertake would cut privileges such as short work hours, long leave, extra monthly wages paid in December, early retirement, etc. Apparently, the Northerners felt they had little to gain and a lot to lose from a change in government.

In short, industrial blue-collar Italy is conservative, apprehensive and does not trust the leftist parties. One major reason for this attitude can be suspected in the fact that an earlier center-left government under Mr. d'Alema permitted the immigration of large numbers of people from eastern Europe and North Africa, especially Albanian boat people who turned out to be highly criminal and violent, and spread fear among northern Italians.

It does not require much imagination to predict that Mr. Prodi's new government will face an uphill battle in trying to win the trust of northern Italy. All the more remarkable is the fact that it was central Italy which gave Mr. Prodi the small majority he obtained.

The odds he is facing are daunting. His predecessor, thanks to the absolute majorities in parliament he enjoyed and exploited, had turned Italy upside down. Whereever Mr. Prodi turns he will see the grinning face of Mr. Berlusconi. It will take several terms and stable majorities to undo the damage caused during the Berlusconi years.

Whether he likes it or not, Mr. Prodi will find himself every day dealing with Berlusconi's heritage. The economy is stagnant; exports are limping; Italian companies slid far down in their international ranking; Italy's public finances are in shambles. Public debt is expected to top 108 percent of GDP and the fiscal deficit to hit 4 percent, both again well above the Maastricht maxima.

But there are other indicators which are just as worrying. Private capital is again fleeing Italy in direction of Switzerland and other safe havens, mainly because the new government is expected to reinstate the inheritance tax and introduce property taxes and other darling projects of the extreme left wing members of Mr. Prodi's shaky coalition.

Small wonder that international capital markets reacted negatively to Mr. Prodi's victory. Instead of honoring his pledge to get Italy back on track as he already once did when he succeeded in readying the country for membership in the Euro zone, the capital markets apparently expect him to fail and succumb to the alleged inability of the extreme left to accept social reforms and belt tightening.

Although there is as yet no reason to talk about an impending government bankruptcy, Argentinian style, the attitude of the capital markets could become a self fulfilling prophecy because Italy, after the five years of malgoverno by Mr. Berlusconi, sorely needs to modernize. Withholding international credits and investments — in combination with domestic capital flight — is likely to render modernization strenuous if not impossible.

However, it is too early to cry wolf. Italy has always shown a strange ability to implement sweeping reforms and jump ahead when it was least expected. Mr. Berlusconi's strong showing during the recent election is, in a way, proof that all Italians have understood the need for reforms. Half of them voted for reforms, the other half hoped to postpone or avoid reform by voting against it.

In this climate of public awareness there is a chance — albeit not a strong one — that the groups on the extreme left, parties and trade unions, will understand the national emergency and not sabotage Mr. Prodi's reform initiatives.

Let us hope that Italy will be able to turn the corner. If it fails, the prodisconia sickness will weaken the country to the point where Mr. Berlusconi could, with his biggest smile ever, return "to save the country."

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—— Giorgio Ascoltone