Italian Government, Usually Overheated, Makes Cool Choices

ITALIAN politics - which usually have all the intrigue and fascination of an American soap opera - may be taking a short commercial break.

Following the spectacular downfall of Prime Minister Silvio Berlusconi last month, the appointment on Friday of economic guru Lamberto Dini as prime minister-designate reflects hard economic realities. Mr. Dini is expected today to name a nonpolitical government of experts, designed to win broad parliamentary backing.

Such a government would be unusual anywhere, but it is especially so given Italy's turbulent politics. Mr. Berlusconi's government collapsed after one of its three main coalition partners, the Northern League, withdrew and began flirting with the center-left opposition.

Behind the political show, however, is a struggling economy that pushed President Oscar Luigi Scalfaro on Friday to choose Dini, treasury minister under the Berlusconi government.

Italy's public debt in 1994 amounted to a whopping 123.2 percent of gross national product (GNP). The appointment of the austerity-minded Dini calmed financial markets: The lira recovered sharply after hitting daily record-breaking lows against the mighty German mark during this latest government crisis.

``Dini's an authoritative figure in the economy,'' says Sen. Carmine Mancuso, a maverick who belongs to the left-wing opposition. ``But he's very linked to Berlusconi.''

Dini pledges immediate actions on four pressing domestic issues:

* Raise as much as 15 trillion lira ($24.3 billion) to make up for a shortfall in the Berlusconi government's 1995 budget. This will undoubtedly mean new taxes, a step Berlusconi could not take without violating a read-my-lips campaign promise.

* Undertake serious reform of the country's pension program - one of the world's most generous - which constitutes about 15 percent of the country's GNP. The country's trade unions rallied the largest worker demonstrations in decades after they portrayed Dini's previous attempt at reform as hitting the weak too hard.

* Establish, with the strong backing of President Scalfaro, equal access to television for all political parties. Before entering politics, Berlusconi had created three television networks, which competed directly with the three state-owned networks. Remaining their owner during his tenure as prime minister led his critics to accuse him of conflict of interest.

* Reform the regional elections system, which includes deciding whether to have a primary and a final election or only a single visit to the polls.

Some opposition members say that if the Dini government wins parliamentary approval, it could last for the entire five-year term of the Parliament.

But Berlusconi and his right-wing allies argue that Dini's task is to lead the country to early elections. Since the majority of the people voted for Berlusconi and his coalition, only a Berlusconi-led government is legitimate, they argue. Berlusconi and his allies even know when they want to go to the polls - June 11 - and claim they have a secret accord with Scalfaro to vote then.

Meanwhile, Berlusconi's party is trying to increase its parliamentary clout by wooing dissident Northern League parliamentarians who didn't agree with the decision to bring down Berlusconi's government.

Senator Mancuso foresees early elections in June, as Berlusconi predicts, because in his view Dini does not have solid, long-term parliamentary support. Nonetheless, he will vote in favor of Dini's government.

``The economy is on its knees,'' Mancuso says. ``Italy needs a government.''

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