Created: 3/17/1994

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11 uX

Directorate of Intelligence

Intelligence Memorandum

Ofrlce of European Analysis4

Italy: No Clear Outcome in Sight With Less Than Two Weeks to Elections


. taly is in final campaign siretch before national electionsarch. As things now stand, neither the leftist Progressive Alliance" nor the rightist "Freedom Pole-willajority of seats.

Silvio Berlusconi's Forza Italia movement on the right continues ioead in overall popularity, but Forza Italia has fielded relatively few candidates of its own.

Caodidaies have been preoccupied with trading personal attacks; debate on substantive issues has been limited and foreign policy has scarcely figured in the campaign.

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this confusion, veteran political moderates are increasingly callingost-election "institutional government" similar io the current adminisuration

This memorandum wit nropifcd byH Office of liuropcinCoounenn ind ourtltt ut wtkorae mdhew in*


Any such coalition, which might rely on technocrats orrokered arrangement with broad party participation, would be weak and unlikely lo last long.

Such an outcome is probably more likelyightistwould be plagued with internal bickering and torn over the role of thea center-left pact which would tie the resurgent Democratic Party of the Left with discredited traditional politicians.





Berlusconi Still Ahead, Bul Experiencing Setbacks...

Por several weeks Italian media magnate Silvio Berlusconi's new Forza Italia (FI) party seemed to be taking the jadcd.'scandal-weary Italian electorate by storm. Recent polls indicate, however, that Berlusconi and his allies on the right have slipped back to approximate parity with the leftist "Progressive Alliance" dominated by the Democratic Party of the Lefthe former communists. Each has the support of ar^roxirnatelyercent of voters who have made their up their minds (see Figure).

According to early March surveys, however, aboutercent of voters remained undecided, and more thanercent could not identify local candidates and Uieir platforms or understand how the new electoral laws work.

On its own, Forza Italia continues to lead other parties in opinion polls but is coming up against the limitations of entering the race lateew group. One of the last of the pre-election polls, which by law cannot be published in the final two weeks of the campaign, suggests that Forza Italia's popularity may not translate into parliamentary seats.

An early March survey by the respected polling firm CIRM, whkh asked voters their parry preference for smglc-raember-disrrictwill account forercent of seats in parliament-shows the Democratic Party of the Left (PDS) and its allies leading withercent overercent for tbe right. Moreover, Forza Italia candidates on their own garnerercent, compared toerccn for the Northern League andercent for the National Alliance.

ilar virtue of being new to politics,

This almost certainly is due to Forza Italia's lack of recognizable, established candidates and threatens to undermine its hopesajor electoral success, despite the popular appeal of Berlusconi's upbeat, "can-do" campaign. I

but voters confused about new balloting procedures and the proliferaiion of new parties ' arc seeking familiar names.

Forza Italia has fewer well-known candidates than other parties, although they include Ambassador Sergioeading foreign policy writer and former diplomat, and retired General Luigi Caligaris, defense policy commentator. Both arc being bruited as ministerial prospectsorza-led government. I

Although fresh faces are presumed to be untainted by corruption, some appear not to have been well-vetted, and politicians recycled from other parties may come with some risk.


, 1





nd tht Knives Arc Out For Him

Berlusconi has taken some recent hits, however. Heougher raceanticipated for the lower house seatrestigious district in the heartHis opponent on the Progressive Alliance slate. Budget Ministerhas come from behind and-boosted by the personal campaigninghas avoidcd--is now tied with Berlusconi in the polls atercent. I

Looking Ahead with Concern

Tbe intensified focus of parties across (he political spectrum oo the "threat* that Berlusconi poses to many of them has helpedush debate of substantive issues farther to tbe margins than usual in the campaign.

In the televised, multiparty pane! discussions that dominate eveningof plaiforms and specific proposals rarely progresses beyondForeign policy issues are peripheral to nearly every debate. I

ecline in ihc importance of ideology in post cold war politics, tins electron campaign is seeing parties fall back on old labels to define their adversaries and themselves, with the nghf warning against the old habits of communism and the center and left urging oppositionevival of fascism.

Because so many voters are having trouble sorting through the challenges of new parties, issues, and election rules, many may rely on old ideological signposts to make their decisions in the voting booth, which would likely benefit the center.

Against this unscltlcdange of established political figures--including former Prime Minister Giuliano Amato, Popular Party chief Mino Martrnazzoli. Reform Pact leader Segni. former Defense Minister and Liberal Party

fonfirianliril ,

legislator Valeno Zanone. and Republican Party chief Giorgio La Malfa-are now calling for the formation of an "institutional* government following the election.

As individuals whose parties are almost certain to be among the "losers" in the elections, they areormula (hat would best safeguard their interests and givehance of participating in government.!

Talk of an "institulional government' is probably also being driven by the view among Italian elites that no easily workable coalition will emerge from (he election-especially if the rightist "Freedom Pole" comes out ahead.

Internal bidtering-especially over the role of the neofascist National Alliance-probably would prevent the right fromovernment. Personality clashes between Berlusconi, fury and outspoken League leader Bossi. and neofascist Fini would almost certainly complicate nutters.

Tbe PDS could try toovernment with the cxrjuists-party leader Ochetto refuses to rule this out-bui this would link the PDS with rnembers of the discredited traditional parties. They would be more likely, in our judgment, to bide their time with angovernment, perhaps with some PDS participation. This would allow them to boost their respectability and imagearty responsible enough to govern, while hoping that in the meantime the Berlusconi phenomenon fades.

Both the PDS and Berlusconi have accepted the possibility of an "institutional" governmeni. The Northern League-which hai last significant support to itstalia ally-hasimilar concept in its callsgovernment of guarantee."

A likely election outcome appears lorokered coalition with broad

participationeavy reliance on technocrats. Potential leaden include Prime

Minister Ciampi and Romano Prodi. Chairman of the state holding company

overnment would almost certainly will be weak, however, and unlikelylong.

Implications far the US

Whatever government emerges from (he elections, Italian foreign policy willeriod of uncertainty, particularly over (he long run:

Because an "institutional" governmeni would be short-lived and preoccupied wiih domestic political reform, il would retain the foreign policy posture of the current regime. Nonetheless, Rome would be increasingly worried that Italy is not being taken seriously because of iis lingering domestic political woes. Italian officials would be especially sensitive io perceived diplomatic slights and would press hard for consultationseat at the table on important international issues such as Bosnia.

In the shortDS-center alliance would work hard to convince its allies that iteliable NATO partner. Over the longer run, however, the foreign policyDS-dominated government would probably diverge with that of the United States, particularly on security matters such as US basing rights.

In the less likely eventightist government, Rome would be more nationalist and assertive and less likely to follow the US lead. For his part, Berlusconi would make economic and commercial interests the driving force behind Italian foreign policy.

Original document.

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