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Why Italy's Political Mess Really Matters This Time


International Outlook

WHY ITALY'S POLITICAL MESS REALLY MATTERS THIS TIME

What do animal-rights advocates, a former porn star, and Mussolini's 29-year-old granddaughter have in common? All are parliamentary candidates in one of the most highly charged campaigns in recent Italian history. In the Apr. 5 vote, the traditional parties that have shared power since World War II will be put to the test by neofascists and an array of new organizations, including dozens of single-cause groups such as pro-hunting activists, the Housewives Party, and the powerful Leghe--secessionist leagues that want an autonomous republic in the rich north.

Normally, Europeans do not worry much about ferment in Italy, where a kind of steady chaos has reigned since the war. But this round is different. If Europe is to stay on the road to monetary and political union agreed to at the recent Maastricht summit, it needs an Italy that can deliver on reforms needed to bring the country in line with other powers.

B-TEAM? The betting is that the Christian Democrats, in power for 46 years, will lose their working majority. Such a result may produce a fractious coalition that is incapable of reining in 6% inflation or curbing budget deficits, which now stand at 10% of gross national product--twice American levels.

Already, many Italians say the country is not taking needed steps to stay in the economic forefront. As the deadline for economic unity nears, state companies still control vast swaths of industry and finance, and the government protects champions such as Fiat and Olivetti. While small-scale industry remains a potent force, Italy's macroeconomic numbers are looking more like Spain's or Portugal's rather than Europe's first team, captained by Germany. "Italy is diverging with Europe, not converging," says Olivetti Chairman Carlo De Benedetti.

But Italy's problems coincide with political disarray in other European Community mainstays. On Mar. 22, the French Socialists suffered a humiliating defeat at the hands of environmental parties and the right-wing National Front. The Apr. 9 British election seems unlikely to give any party a strong mandate. Weak governments will be vulnerable to special interests and groups such as the Leghe, which stand to win a hefty chunk of the vote in Italy's north. "The problem," says one senior executive in Rome, "is that while leaders are continuing to talk about integration, the grass roots is thinking about disintegration."

That is especially true in Italy, where fear of the Communist Party is what kept the Christian Democrats in power so long. But with the Soviet collapse, the party is losing its raison d'etre. Instead, voters are focusing on the CDs' reputed corruption and aging leadership.

As the campaign heats up, Prime Minister Giulio Andreotti and his ally, Socialist leader Bettino Craxi, are pinning their hopes on the poor, crime-ridden south. There, local bosses often can corral tens of thousands of votes. But the mysterious Mafia-style slaying in Palermo on Mar. 12 of Salvo Lima, a key Andreotti stalwart who supposedly could deliver 250,000 votes, has put even that strategy in doubt. The rattled Andreotti has accused unnamed elements of trying to destabilize Italy.

While the wily, 71-year-old Andreotti may yet survive the crisis, the decline of Christian Democrat influence could make it harder to dm business in Italy--at least in the short run. The shakeup may also presage upheaval in other EC countries, as the twin shocks of the cold war's end and the single market's beginning to work their way through the political system.John Rossant in Rome EDITED BY STANLEY REED


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