Castles in the air?

Italy's poor economic situation is giving rise to doubts about the feasibility of Mr. Berlusconi's ambitious plans. Vaiju Naravane reports.

AS JUNE draws to a close, Italy shimmers in the noonday sun. Magazines are packed with advertisements for swimsuits and sun creams, exotic holidays and diet pills. ``Everybody's mind is on the vacations. No one is bothered about the Government. The heat makes it difficult to work - something Italians find difficult to do even in the best of circumstances. So it will only be in September, when people have returned to their jobs with their pockets empty and the summer behind them, that criticism of the new Government will begin in earnest,'' says the sociologist, Mr. Manuel Silva.

The media magnate, Mr. Silvio Berlusconi, and his right-wing coalition called the House of Freedoms were given a convincing majority in both Houses of Parliament in elections held on May 13. However, it was barely ten days ago that he formed his new Government.

Even his critics admit that Mr. Berlusconi was able to woo men of stature such as the former WTO chief, Mr. Renato Ruggiero, into his Cabinet. Key portfolios such as Economy and Finance, Justice and the Interior have been given to highly respected, technocrats from Mr. Berlusconi's own Forza Italia (Let's go, Italy) party, which has emerged as the country's single largest political formation.

For example, Mr. Giuliano Tremonti, architect of Mr. Berlusconi's economic agenda for the electoral campaign has been named Super Minister of Economy and Finance, ensuring that Mr. Berlusconi controls both treasury receipts as well as expenditure. Mr. Berlusconi's confidante Claudio Scagola is in charge of the Interior Ministry, which deals with income tax raids and the law and order machinery in general.

The media tycoon has also been clever enough to give the problematic portfolios to his coalition partners. His bete noire, Mr. Umberto Bossi, the raucous, xenophobic leader of the anti- foreigner Northern League has been made Minister for Devolution and Territorial Reforms.

Mr. Bossi who was responsible for bringing down the first Berlusconi Government in 1995 is now in charge of federalism and national integration, while Mr. Roberto Maroni, also of the Northern League, has been saddled with the difficult portfolio of labour relations where he will have the unenviable task of managing inflated state pensions which are a huge drain on Italy's economy.

The wily Mr. Berlusconi will keep his troublesome allies both busy and vulnerable. Notwithstanding his judicious choice of ministers, Italy's poor economic situation is giving rise to doubts about the feasibility of Mr. Berlusconi's ambitious plans for his countrymen. ``Mr. Berlusconi made wild campaign promises and even a lay person could have foreseen that the figures did not add up.

You cannot raise pensions, lower taxes by as much as 30 per cent and undertake huge investments in infrastructure all in the same breath. His was a populist campaign if ever there was one and the Government is now trying furiously to back-pedal,'' says Mr. Giovanni Porzio, a journalist.

Just last week, the Government announced that it had discovered a huge hole in the country's finances and that the tax cuts would have to be postponed for an unspecified period. Undoubtedly, the same excuse will be proffered to explain the delays in infrastructure building.

Mr. Berlusconi has also suffered some embarrassment at the hands of Mr. Bossi who began his ministerial term on a predictably loud note saying he continued to believe in the idea of Padania, a separate sovereign state in Italy's wealthy northern plain. While that was acceptable behaviour from a rabble-rousing local politician, whose rhetoric exploited a sense of fear and insecurity among his constituency of small farmers and businessmen, it cannot be tolerated in a Minister of Cabinet rank, especially one responsible for devolution and territorial reform.

Even as the leader of the Northern league, Mr. Bossi favoured the break up of Italy into three separate republics so that the poor south would not sap the resources of the wealthy north. His latest declarations can hardly bring cheer to Italian southerners.

``More and more people are privately expressing doubts, but chambers of commerce and other industrial associations are keeping mum for the moment. After all, they did give Mr. Berlusconi their support and they would look foolish withdrawing it now. Besides, there is a genuine wait and watch attitude.

I do not expect any pronouncements before autumn when the Government will have run out of its customary 100-day grace period,'' says Ms. Thesi Kness-Bastaroli, president of Milan's powerful Foreign Press Association.

Mr. Manuel Silva agrees with her. ``There is only a surface calm. Underneath everyone is troubled by questions about how the public will react. After all, Mr. Berlusconi went to great pains to convince the people of his sincerity and generosity. If neither is forthcoming soon the backlash will be violent.

In an extremely theatrical television appearance, Mr. Berlusconi made a pact with the Italian people, promising them he would not stand for re-election if he failed to fulfil at least four of his five main campaign promises. It now appears he will be unable to cut taxes, increase pensions or invest in infrastructure, at least in the short term. Italians chose to disregard the dictates of logic and believe in the fantastic promises he made.

The election in May was decided on the basis of emotion rather than reason. If Mr. Berlusconi fails to deliver the response is likely to be an equally emotional phenomenon of rejection,'' concludes Mr. Silva.

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