ITALY: PROSPECTS FOR THE NEW GOVERNMENT

Created: 10/14/1980

OCR scan of the original document, errors are possible

SUBJECT: Italy: ospccts Cor the New Govcnnaont

The formationhristian Democratic-Social 1st-Social Democratic-Republican coalition--that may also enjoy tlio parliamentary backing of thebecame assured last week when the Christian Democratic leadership unanimously endorsed the proposal. The Christian Democratic movea tactical reconciliation between tho party's majority forces, whichovernmental alliance with the Socialists and the smaller parties, and its strong left wing, which prefexs^grcater cooperation between the government

and tho opposition Cccnitnists.

The price for the Christian Democratic truce probably includesleadership posts and cabinetor the left King. Leaders ofhope that the leverage thus gained will allow them toternseported secret agrecnert with Cccvmxntst chief BerlinguerCccmmlsts would attenuate their opposition tn the government in returnconsultation on government policies and important parliamentaryappointxrnts. The ability of leftwing Christian Democratsoff this deal will depend ultimately on the more conservative,of their party which jacentlv have demonstrated greaterthe Ccmrmgusts. j

(erlingucr

wouiu uc wmmg it) nuueiatf nisan mesc conditionsj Tne Caomuiiists almost certainly will dealorlani government pragmaticallv--snaping their txppositionase-by-case basis. The demise of the Cossiga government appears to have fulfilled the Lraroiate aims of the party'sto de-aonstratc thatChristian Deancratic-Socialist alliance is an inadcqujte basis for effective government. New for tlie sake of party morale the Ccranunists must demonstrate that they are again making tangible progress toward the goalirect governing role. If the governing parties -re nothr_ Owunlsts almost certainly will sharpen up their opposition.

Italy: Suggested Talking Points

Political

Christian ftamxrats--The cuspromisf' on the MM governing formula seems io lave papered over--perhaps only temporarily--the major issue dividing the party: whether the Socialists or the Communists should be the Christian Democrats' principal inu-rlocutor at the national political level. However, thoon the new governing forsula seems vague and contains inherent contradictions that ocy cause it to ecu* unstuckew government attempts to tackle mjor substantive issues.

chief Craxi seems to havo solidified his hold on tlitf Socialist leadership by reducing the influence of its left wing and urproved his leverage within the government by liis agreement with the Social Democrats and his flirtations with the Radical?. (Jut the Socialistsasically schi:orhrcnic party, ar-JjCraxi's ability to minimize and ultimately eliminate potential splits depend? on his success In demonstrating his party'soncept that inevitably will lose credence if the new sovemment comes to depend on the Ccemiinists in some way for support.

resignation of the Cossiga government has relieved scoc of the Internal pressure on Berlinguer by providing the Communis: chiefadlv needed tactical victory. Byhard opposition" against the previous ^xnimcnt, nerlinguer was able to mollify the traditionalist rank and file which was dissatisfied with the party's unsuccessful efforts toirect governing role. Now, the Gammunists probably can afford to shift gears--at leasthilc--andsoft line" to reassure those moderate non-CcemDiists who have supported the par'y in the piist.

Econcnics

bccoceiics Program and Fiatev test of the new coalition will be its success in working out an acceptable eccnomic program. This issue and the settlement of the Plat dispute will be important indicators of whether the Crraaunlsts will be willing to cooperate with the government and whether the governing parties will be willing te accept Communist assistance in tackling these problems.

Public Order

eriods in which the Cocwmisis have lent support to tlie gjwiBrerit usually have hQM acccmsjianicd by an increase in terrorist violence on the left. If the Ccmmunists do, in fact, niodoratc their stance toward tlie now government, tlie level of terrorist activity will

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