ROME, ITALY — IN the shade of a lone pine tree on the island of Caprera, Socialist leader Bettino Craxi paid homage at the graveside of Giuseppe Garibaldi, the hero of 19th century Italian unification. But more than commemorating the anniversary of Garibaldi's death, Mr. Craxi's visit last week to the craggy shores of this island north of Sardinia was to stump for Socialist candidates before regional elections. Sunday's vote marks the final round of a divisive campaign for the June 18 elections to the European Parliament.
Craxi's four stable years as prime minister and his strong-arm tactics within Italy's coalition government have earned him the reputation as the modern Italian politician to be reckoned with. He is looking to both elections as a litmus test of his leadership. Socialists control roughly 14.3 percent of the Italian vote.
The election results will also largely determine the outcome of a three-week political crisis triggered by Craxi. This crisis toppled the five-party coalition government headed by his arch-rival, Ciriaco De Mita. After only 13 months in power, the government fell on May 19 amid constant feuding between Prime Minister De Mita and Craxi.
Since then, Senate President Giovanni Spadolini has been trying to piece together another version of the centrist coalition that has governed Italy since 1981. He is expected to conclude negotiations with political power brokers tomorrow. But the future of Italy's 49th post-war government will hinge on the June 18 elections.
Even a subtle shift of votes in what is one of Europe's most rigid electorates could have a big impact on the political balance in Italy. Recent polls show the Socialists picking up votes, even if only by a slim margin. Craxi's party is expected to advance at the expense of the Communists (PCI), who, with 26.6 percent of the vote, are struggling to remain Italy's second-largest political force.
Ironically, substantial gains by the Socialists and a serious setback by the PCI could pave the way for a left-wing government in Italy that would exclude the Christian Democrats for the first time in postwar history. Christian Democrats control 34.3 percent of Italy's vote.
Although the Socialists have openly talked of building a unified left in Italy to coincide with European unification in 1992, Craxi remains suspicious of the PCI.
Meanwhile, the stakes are high for the Italian economy. Progress on important measures affecting the economy is unlikely with a weak government or no government at all. Italy is currently racked by a series of strikes affecting air, rail, and bus transportation, but legislation regulating strikes is on hold. The reform of the state-owned railway is pending along with antitrust legislation, and plans to reduce Italy's giant deficit by 1992 are also on hold.
Business leaders fear the delays could mean that Italy will fall behind as European nations gear up for integration. Already, Italy's public services and administration are considered primitive by European standards. In the aftermath of the government collapse, Sergio Pininfarina, the head of the employers' federation Confindustria, complains that Italian enterprises are penalized by high taxes, low quality of services, and a rigid government bureaucracy.
`HOW can we be in Europe with our disastrous public services?'' asks Mr. Pininfarina, who warns that in depriving Italy of a government that can implement change, ``we are doing the opposite of what this country needs.''
De Mita's government was committed to a series of landmark political reforms. Instead, the incessant fighting prevented the achievement of all but the most rudimentary objectives - such as the abolition of the secret ballot in Parliament. The secret ballot was often used as a weapon by coalition members to snipe at a government.