Berlusconi Gets Mandate to Form New Government

Eager to take his place at two European summits this week, Silvio Berlusconi received a formal mandate from Italy’s president Saturday to assemble a Cabinet and assume the job of prime minister as early as today.

The two men met in the evening after a month of haggling among the media tycoon’s center-right allies over the spoils of a May 13 election and Italy’s place on a continent whose policies of unification are at odds with key parts of his program.

After decades of unquestioning support from Italy, one of its six founding members, the European Union will now face a leader who promises tax cuts that could undermine the young euro currency, who balks at the alliance’s eastward expansion and who dissents from its support for an international treaty on global warming.

Italy’s neighbors are also troubled by the anti-immigrant views of Berlusconi’s rightist partner, Umberto Bossi, and the billionaire businessman’s own conflict of interest between his public duties and his business empire, which includes Italy’s largest private television networks.

Since coolly acknowledging his triumph at the polls, European leaders have begun urging the 64-year-old prime minister-elect to continue what German Chancellor Gerhard Schroeder, in a message to Berlusconi, called Italy’s “traditionally Europe-friendly attitude.”

Berlusconi has responded with clubby assurances, saying he is “proud” of Italy’s place in Europe. He made a point of deciding on his Cabinet nominees in time to take office early this week so that he can represent Italy at a North Atlantic Treaty Organization summit in Brussels on Wednesday and an EU summit in Goteborg, Sweden, later in the week.

His choice for foreign minister is Renato Ruggiero, 71, a widely respected Europhile who once led the World Trade Organization. Ruggiero and several other nominees are decidedly more moderate than Berlusconi on controversial elements of the prime minister-elect’s program.

Whether the tycoon will adjust his positions to suit Italy’s neighbors will become clear only in the coming months.

Technically, Berlusconi will become prime minister as soon as he returns to President Carlo Azeglio Ciampi with the names of his ministers and secures Ciampi’s approval. That is expected today and should be followed by a formal swearing-in Monday. The Cabinet must then win a parliamentary vote of confidence, which is due sometime next week.

Berlusconi’s House of Freedoms alliance won control of both houses of Parliament in last month’s election, returning the tycoon to power 6 1/2 years after he served a volatile first term as prime minister that lasted just seven months.

The coalition is again led by his centrist Forza Italia party--named after the soccer cheer “Go, Italy,”--and includes the right-wing National Alliance, Bossi’s once-separatist Northern League and two small Christian Democratic parties.

Gianfranco Fini, who steered the National Alliance away from neo-fascism in the mid-1990s, is the nominee for deputy prime minister in a Cabinet list dominated by Berlusconi’s Forza Italia loyalists.

Bossi, a boisterous nationalist who proposes walling off parts of Italy to keep out immigrants and likens the European Union to the Soviet empire, will not head a Cabinet ministry but will advise Berlusconi on how to give more power to local governments. Members of Bossi’s Northern League were picked to head the ministries of justice and welfare.

Belgian Foreign Minister Louis Michel said recently that he was “shocked that people like Bossi and his racist, xenophobic party can participate in a government in Europe.”

But Bossi, whose defection in 1994 brought down Berlusconi’s first government, has far less power this time. Without the Northern League, Berlusconi would need the votes of only two independents in the Senate to keep his legislative majority.

Europeans are more worried about Berlusconi’s campaign promise to slash income and business taxes by $30 billion while reducing the government’s role in the economy.

The scope of such spending and tax cuts, unprecedented for modern Europe, could shatter the strict debt and deficit limits deemed necessary by the EU to keep 12 euro-zone economies to the same course. Berlusconi has argued that each European country should run its economy in its own way--a rejection of the logic that harmony will help the euro to rival the dollar on world markets.

Two of Berlusconi’s nominees have cast doubt, however, on how deep his promised supply-side revolution will run. Giulio Tremonti, his choice for finance minister, has pledged that any tax cuts will be gradual. And Antonio Marzano, the designated minister of production, has warned that Berlusconi’s planned elimination of a regional tax on company profits would cause friction both at home and with the EU.

The center-right coalition is also divided over the EU’s proposed enlargement into Eastern Europe and Berlusconi’s opposition to an international protocol signed in Kyoto, Japan, on reducing “greenhouse gas” emissions. Italy’s outgoing center-left government last week signed an EU accord to ratify the 1997 protocol, which is also opposed by the United States.

Many Berlusconi allies insist that development of Italy’s poor south must come before the EU starts subsidizing new members. Ruggiero, who knows Eastern Europe well and backed Russia’s entry into the WTO, is reported to disagree.

In the messy jostling for Cabinet posts, Ruggiero, one of the few independents chosen, came under fire for being an outsider, a candidate reportedly imposed on Berlusconi by the president and Italy’s traditional industrial elite.

“Ruggiero represents precisely the system we want to change,” Bossi complained.

Berlusconi also rejected Bossi’s loud demand that his top aide, Roberto Maroni, be made speaker of Parliament’s lower house, and later withdrew Maroni’s nomination as justice minister because of his past tangles with prosecutors over his advocacy of northern Italian secession.