High-wire act for Italy's Berlusconi

Prime Minister may face a no-confidence vote.

A small cartoon in Italy's largest newspaper Tuesday showed a simple sketch of a roof and a chimney with smoke puffing out at the top. Written in the smoke, referring to Italy's prime minister: "I'm not resigning."

While all eyes watched the Vatican as the cardinals elected a new pope, Italy's pugnacious billionaire PM was battling for his political life. After Britain's Tony Blair, Silvio Berlusconi is America's staunchest ally in Iraq (with 3,160 Italian troops there). But he now faces a possible no-confidence vote in parliament Thursday.

In a nation with a history of changing leaders as often as some people change TV channels, the media mogul is determined to be the first post-World War II prime minister to serve a full five-year term.

But after four years, his center-right coalition government is in trouble. His stance on Iraq has hurt him, but the decisive issue is the stagnant Italian economy, analysts say.

"Although the majority of Italians opposed the war, their biggest concerns are much closer to home," says Franco Pavoncello, a political scientist at Rome's John Cabot University. "Silvio Berlusconi offered them an economic miracle. And so far he has failed to deliver."

When Mr. Berlusconi - with his personal rags to riches success story - won a landslide election victory here in 2001, he promised Italy an "economic miracle."

But rising prices and a stagnant economy have left thousands of Italians struggling to make ends meet. The Italian economy has not fully recovered from the post 9/11 global slowdown. Since 2001, according to a World Economic Forum survey, Italy, the world's fifth-largest economy, has fallen 26 places to 47th in the list of the worlds' most competitive countries. Botswana is placed at number 45.

Italian public debt has continued to grow under Berlusconi, raising warnings from European Union officials that it is well above the agreed barrier of 3 percent of GDP. "We are seeing middle class families whose checks are bouncing, who are having their electricity and telephone lines cut off because they cannot pay the bills," says Guerino di Tora, Rome director of Italy's largest charity, Caritas. "It's a new kind of poverty. These people are not starving. But they have lost the quality of life they used to know."

According to a Demos poll, for the first time since World War II, almost 60 percent of Italians believe their children will be worse off economically than they are. The government statistics office, ISTAT, reported in 2004 that 18.5 percent of Italian families - almost 10 million people - are facing poverty.

For those no longer able to afford a meal out, recent news that their prime minister earned $17 million from his media empire last year just rubbed salt into their wounds.

The public made their discontent known on April 2 when they swung in favor of the opposition left in 11 of the 13 regions up for reelection. The defeat - described by Italian media as a "massacre" - was a strong signal that, after 11 years in politics, the Berlusconi era may be drawing to a close.

Critics say that the prime minister has spent too much time furthering his own personal business interests and evading charges of corruption. He has not concentrated enough on making Italy's economy a success.

Berlusconi insists that such perceptions are off base. He has focused on tax cuts as his best chance of winning back public support before next year's scheduled elections.

The poor showing in regional elections prompted centrist party allies in parliament to revolt earlier this week. The prime minister reportedly agreed to resign Monday, but then changed his mind.

"This is typical Berlusconi. When his back is against the wall, he is willing to take risks. He is gambling on the fact that his allies won't have the guts to let the government fall," says Roberto Menotti, political analyst at the Aspen Institute in Rome.

Some analysts predict that Berlusconi may yet hold on to power by sheer force of personality. The opposition, led by former EU President Romano Prodi, is seen as weak, divided, and unprepared for government.

Wednesday, Berlusconi is to address parliament and the senate before Thursday's vote of confidence. The leader of the House of Liberties alliance must convince his recalcitrant allies - Gianfranco Fini, of the post Fascist National Alliance, Umberto Bossi of the Northern League, and Marco Follini of Union of Christian Democrats - not to withhold their votes in the parliament where they have a majority.

And Berlusconi seems determined to complete his five year-term. "They are wrong if they think they can kill my relationship with the Italian people, the great and real change that I represent," he was reported saying to Italian media in recent days.

"You are trying to hide my charisma," the Corriere della Sera reported Berlusconi saying to his coalition partners recently. "There is no one on the world stage who can pretend to compare themselves to me... My prowess is not for debate."