US embassy cable - 02ROME1744

UNCLAS SECTION 01 OF 05 ROME 001744 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ELAB, PGOV, PGOV, PGOV, PGOV, PGOV, IT, ITELAB, ITELAB, ITELAB, ITELAB 
SUBJECT: TWO DEMONSTRATIONS DOWN, ONE GENERAL STRIKE TO GO 
 
REFS: A) 01 ROME 3893; B) 01 ROME 6301; C) ROME 1421; 
      D) ROME 1462 
                       UNCLASSIFIED 
 
PAGE 02        ROME  01744  01 OF 05  081356Z 
 
SUMMARY 
------- 
1.  STRIKES AND LABOR DEMONSTRATIONS IN ITALY ARE MOUNTING. 
WORKING HOURS LOST TO STRIKES IN JANUARY-FEBRUARY WERE NEARLY 
1,500 PERCENT HIGHER THAN IN COMPARABLE MONTHS OF 2001. 
TRADE UNION CONFEDERATION CGIL ORGANIZED A RECORD MILLION- 
PLUS ANTI-GOVERNMENT PROTEST IN ROME 3/23, FOLLOWED 3/26 BY 
ITALY-WIDE TRADE UNION RALLIES AGAINST TERRORISM.  OVERCOMING 
DIFFERENCES, ALL FOUR NATIONAL TRADE UNION CONFEDERATIONS ARE 
PLANNING A GENERAL STRIKE 4/16 TO PROTEST PROPOSALS FOR GOI 
LABOR LAW REFORM.  CONFRONTATION SEEMS TO BE IN THE AIR, 
REMINISCENT OF TURMOIL THAT HELPED BRING DOWN THE FIRST 
BERLUSCONI GOI IN 1994.  MEANWHILE, THE RED BRIGADES' 3/16 
ASSASSINATION OF LABOR MINISTRY ADVISER MARCO BIAGI ADDS 
FURTHER UNCERTAINTY - RECALLING THE TERRORISM-PLAGUED "YEARS 
OF LEAD" OF THE 1970'S-1980'S. 
 
2.  BUT SIMILARITIES NOTWITHSTANDING, TIMES HAVE CHANGED. 
CURRENT PROBLEMS STEM FROM FUNDAMENTAL SHIFTS IN ITALIAN 
SOCIETY.  ITALY'S WELTER OF SHORT-LIVED, SHIFTING COALITION 
GOVERNMENTS HAS ENDED.  A STABLE ALLIANCE THAT HAS EMERGED ON 
THE CENTER-RIGHT IS BENT ON USING ITS PARLIAMENTARY MAJORITY 
TO ENACT LONG-DELAYED REFORMS.  "BIPOLARISM" IS INCOMPLETE ON 
THE CENTER-LEFT, HOWEVER, WHERE PREVIOUS POLITICAL ALLIANCES 
ARE DECOMPOSING AND NO COHERENT OPPOSITION CAN CHECK THE 
GOVERNMENT IN PARLIAMENT.  WITH REGARD AT LEAST TO LABOR LAW 
REFORM, THIS ROLE HAS BEEN TAKEN UP OUTSIDE THE PARLIAMENTARY 
FORUM BY CIVIL SOCIETY'S STRONGEST INSTITUTION, THE 5.4 
MILLION-MEMBER TRADE UNION CONFEDERATION CGIL.  GOVERNMENT 
MISSTEPS CONTRIBUTED TO A CLOSING OF LABOR'S RANKS AND THE 
                       UNCLASSIFIED 
 
PAGE 03        ROME  01744  01 OF 05  081356Z 
TRANSFORMATION OF A MINOR ELEMENT IN ITS REFORM PROGRAM 
("ARTICLE 18") INTO A TRANSCENDENT SYMBOL OF WORKER RIGHTS 
FOR THE UNIONS AND, FOR THE GOI, ITS RIGHT/OBLIGATION TO 
GOVERN. 
 
3.  THE EMERGING UNION/GOI CONFRONTATION INVOLVES NO 
FUNDAMENTAL DIFFERENCES IN GOVERNING PHILOSOPHY OR PROGRAM. 
EACH SIDE SUPPORTS DEMOCRACY, MAJORITY RULE, HUMAN RIGHTS, 
AND ECONOMIC PROGRESS.  FOR THE MOMENT, HOWEVER, THE 
CONTENDERS MUST WRESTLE WITH THE CONSEQUENCES OF 
PARLIAMENTARY DEMOCRACY'S SHORTCOMINGS AND THOSE OF ITALIAN 
SOCIETY'S HIERARCHICAL, NON-EGALITARIAN HERITAGE.  END 
SUMMARY 
 
PARLIAMENTARY DEMOCRACY: A RETURN TO DEMOCRATIC CENTRALISM 
--------------------------------------------- ------------- 
4.  ONCE UPON A TIME ITALY WAS GOVERNED BY SHORT-LIVED 
GOVERNMENTS, COMPOSED OF SHIFTING COALITIONS, THAT HAD A 
FACTION-RIDDEN CHRISTIAN DEMOCRATIC (DC) PARTY AT ITS CENTER. 
WITH SOME VARIATION, 52 SUCH EXPERIENCES TOOK PLACE BETWEEN 
THE REPUBLIC'S PROCLAMATION IN JUNE 1946 AND "BIPOLARISM'S" 
EMERGENCE IN MAY 1996.  IN SEVERAL CASES, A MINORITY DC 
GOVERNED ALONE, TACITLY SUPPORTED BY ALLIES NOT FORMALLY PART 
OF THE GOVERNMENT.  ALTHOUGH RESPONDING TO PRAGMATIC AND 
PERSONALITY CONSIDERATIONS, THE PARTIES PRETENDED TO BE 
MOTIVATED BY PARTICULAR IDEOLOGIES - CATHOLICISM, SOCIALISM, 
LIBERALISM.  THE IDEOLOGIES MADE DECISION-MAKING DIFFICULT, 
IF NOT IMPOSSIBLE, FOR GOVERNMENTS THAT RISKED BREAKUP OVER 
INTRACTABLE ISSUES.  THE CONTINUOUS FORMATION, BREAKUP, AND 
RECOMPOSING OF GOVERNMENTS LEFT CITIZENS LITTLE OPPORTUNITY 
TO CONTROL THE COMPLEXION OR POLICIES OF GOVERNMENT THROUGH 
                       UNCLASSIFIED 
 
PAGE 04        ROME  01744  01 OF 05  081356Z 
THEIR EXERCISE OF THE BALLOT. 
 
5.  THAT PERIOD HAS ENDED.  IN THE EARLY 1990'S, THE PARTIES 
THAT HAD FORMED 50 POST-WWII REVOLVING DOOR GOVERNMENTS 
IMPLODED UNDER THE PRESSURE OF JUDICIAL "CLEAN HANDS" 
CORRUPTION INVESTIGATIONS.  A NEW PARTY (FORZA ITALIA - FI), 
FOUNDED BY BUSINESSMAN SILVIO BERLUSCONI, EMERGED AS THE 
WINNER OF MAY 1994 ELECTIONS.  FI WAS NOMINALLY CENTER-RIGHT 
AND DREW MUCH OF ITS SUPPORT FROM FORMER DC VOTERS.  IT WAS 
NON-IDEOLOGICAL, HOWEVER, PROJECTING ITS FOUNDER'S IMAGE OF 
MODERNIZING, BUSINESSLIKE PRAGMATISM.  BERLUSCONI FORMED A 
GOVERNMENT WITH HELP FROM ANOTHER PRAGMATIST, GIANFRANCO 
FINI, WHO SOUGHT TO RESHAPE FASCISM'S POST-WWII HEIR (THE 
MSI) INTO A CONSERVATIVE, BUT CONTEMPORARY PARTY (THE 
ALLIANZA NAZIONALE - AN).  STILL SHORT OF A PARLIAMENTARY 
MAJORITY, BERLUSCONI WAS FORCED TO TURN TO THE SOMETIME 
SECESSIONIST NORTHERN LEAGUE (LN), LED BY MAVERICK UMBERTO 
BOSSI.  THE COMBINATION PROVED UNSTABLE, AND BERLUSCONI'S 
FIRST ATTEMPT AT GOVERNING ITALY COLLAPSED SEVEN MONTHS AFTER 
IT WAS FORMED. 
 
6.  LEFT-OF-CENTER PARTIES, LARGELY UNTOUCHED BY THE "CLEAN 
HANDS" INVESTIGATIONS, BENEFITED FROM BERLUSCONI'S FAILED 
1994 VENTURE.  ROMANO PRODI FORMED A GOVERNMENT IN MAY 1996 
THAT UNITED UNDER ONE UMBRELLA ALL MAJOR POLITICAL FORMATIONS 
TO THE LEFT OF CENTER, WITH CRITICAL SUPPORT IN PARLIAMENT 
FROM FAR-LEFT COMMUNIST RENEWAL (RC).  PRODI'S GOVERNMENT 
 
                       UNCLASSIFIED 
 
                           UNCLASSIFIED     PTQ7924 
 
PAGE 01        ROME  01744  02 OF 05  081356Z 
ACTION DRL-02 
 
INFO  LOG-00   NP-00    AID-00   A-00     CA-01    CCO-00   CEA-01 
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      WHA-00   SRPP-00  DS-00    EB-00    EXME-00  EUR-00   E-00 
      UTED-00  VC-00    FRB-00   OBO-00   H-01     TEDE-00  INR-00 
      ITC-01   LAB-01   L-00     VCE-00   M-00     AC-01    DCP-01 
      NSAE-00  NSCE-00  OCS-03   OMB-01   OPIC-01  OPR-01   PA-00 
      PC-01    PM-00    PRS-00   ACE-00   P-00     SCT-00   SP-00 
      IRM-00   SSO-00   STR-00   TEST-00  TRSE-00  USIE-00  USSS-00 
      R-00     PMB-00   DSCC-00  G-00     NFAT-00  SAS-00     /016W 
                  ------------------80AAD4  081356Z /38 
R 081306Z APR 02 
FM AMEMBASSY ROME 
TO SECSTATE WASHDC 3151 
INFO EUROPEAN POLITICAL COLLECTIVE 
DEPT OF LABOR WASHDC 
AMCONSUL FLORENCE 
AMCONSUL MILAN 
AMCONSUL NAPLES 
 
UNCLAS SECTION 02 OF 05 ROME 001744 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ELAB, PGOV, IT 
SUBJECT: TWO DEMONSTRATIONS DOWN, ONE GENERAL STRIKE TO GO 
 
DISTINGUISHED ITSELF BY EXERCISING SUFFICIENT INTERNAL 
DISCIPLINE (ESPECIALLY FISCAL DISCIPLINE) TO QUALIFY ITALY 
                       UNCLASSIFIED 
 
PAGE 02        ROME  01744  02 OF 05  081356Z 
FOR ENTRY INTO THE EUROPEAN MONETARY UNION (EMU).  PRODI'S 
GOVERNMENT ENDED IN OCTOBER 1998 WHEN RC WITHDREW ITS 
SUPPORT.  HIS WAS SUCCEEDED BY THREE FURTHER CENTER-LEFT 
GOVERNMENTS, WHICH RESEMBLED DC PREDECESSORS IN THAT THEY 
CHANGED OFTEN AND ACCOMPLISHED LITTLE.  VOTERS REJECTED A 
REPEAT CENTER-LEFT OPTION IN MAY 2001 ELECTIONS AND GAVE 
BERLUSCONI'S FI A SOLID ENDORSEMENT. 
 
7.  THE FI-LED GOVERNMENT BERLUSCONI FORMED IN JUNE 2001 
APPEARS STABLE, ENJOYING MAJORITIES IN BOTH PARLIAMENTARY 
CHAMBERS EVEN WITHOUT THE VOTES OF UNPREDICTABLE LN ALLY 
BOSSI.  IN CONTRACT-WITH-AMERICA STYLE, BERLUSCONI CAMPAIGNED 
FOR OFFICE ON THE BASIS OF AN ACTIVIST PLATFORM TO WHICH FI'S 
POLITICAL ALLIES ALSO SUBSCRIBED.  THE UNRESOLVED ISSUES 
FACED WITHIN THE GOVERNMENT COALITION ACCORDINGLY CENTER MORE 
ON QUESTIONS OF TACTICS AND TIMING THAN PROGRAM.  POINTING TO 
ELECTION RESULTS AND, AS POLLS REVEAL, HIS CONTINUING 
POPULARITY BERLUSCONI SPEAKS OFTEN NOT ONLY OF HIS MANDATE TO 
GOVERN BUT OF AN OBLIGATION TO USE HIS CHAMBER AND SENATE 
MAJORITIES TO ENACT REFORMIST LEGISLATION.  WHILE THE 
GOVERNMENT DOESN'T IGNORE ITS BACK BENCH SENATORS AND MP'S, 
GOI DECISION MAKING RESTS TODAY, PERHAPS MORE THAN AT ANY 
TIME IN THE REPUBLIC'S HISTORY, IN THE HANDS OF A FEW, LIKE- 
MINDED POLITICAL LEADERS. 
 
PARLIAMENTARY DEMOCRACY: IMPLOSION ON THE CENTER-LEFT 
--------------------------------------------- -------- 
8.  ONCE UPON A TIME A DISCIPLINED, OPAQUE ITALIAN COMMUNIST 
PARTY (PCI) DOMINATED THE LEFT PORTION OF THE POLITICAL 
SPECTRUM AND, AT ITS PEAK, GARNERED ONE OUT OF EVERY THREE 
VOTES CAST IN ITALIAN ELECTIONS.  ALTHOUGH THE PCI WAS SPARED 
                       UNCLASSIFIED 
 
PAGE 03        ROME  01744  02 OF 05  081356Z 
THE FALLOUT OF CLEAN HANDS INVESTIGATIONS, SEISMIC EVENTS 
ELSEWHERE (END OF THE BERLIN WALL AND SOVIET EMPIRE'S 
COLLAPSE) PROPELLED IT TO REFORM ITSELF.  IN 1991 THE BULK OF 
PARTY MEMBERS CONVERTED INTO A SOCIAL-DEMOCRATIC PARTY OF THE 
DEMOCRATIC LEFT (PDS).  HARD-LINE DISSIDENTS EXITED AND 
FORMED COMMUNIST RENEWAL (RC).  THAT GROUP IN TURN SPLIT IN 
1995 AND AGAIN IN 1998 WHILE, ON THE PDS SIDE, EFFORTS TO 
UNITE WITH OTHER LEFTIST GROUPS LED THE PARTY TO RENAME 
ITSELF (1998) THE DEMOCRATS OF THE LEFT (DS).  NOT ALL OLD- 
LINE PCI ELEMENTS APPRECIATED THESE MOVES, AND FACTIONALISM 
APPEARED IN A NEWLY TRANSPARENT PARTY THAT, IN SUBSEQUENT 
ELECTIONS, LOST HALF ITS PUBLIC SUPPORTERS - IN MAY 2001, THE 
DS WON BARELY 16 PERCENT OF THE VOTE. 
 
9.  MAY 2001 ELECTIONS DEALT SAGGING DS MORALE A FURTHER BLOW 
WHEN A COLLECTION OF DS CENTRIST ALLIES, ALL SIGNIFICANTLY 
SMALLER THAN THE DS, COALESCED BEFORE THE ELECTIONS (INTO THE 
"DAISY") AND EMERGED WITH 14-PLUS PERCENT OF THE VOTE.  THIS 
DEVELOPMENT LEFT A DIMINISHING DS SUBJECT TO BOTH INTERNAL 
STRIFE (SOME FACTIONS SAW SALVATION IN MOVING THE PARTY 
FARTHER LEFTWARD, OTHERS IN AFFIRMING A MORE CENTRIST 
VOCATION) AND COMPETITION FROM A RELATIVELY EQUAL CENTRIST 
PARTNER IN LEADING THE OPPOSITION TO BERLUSCONI.  ELECTION 
LOSSES AND SQUABBLES AMONG DS AND DAISY LEADERS REVERBERATED 
AMONG THE PARTIES' MEMBERS AND SYMPATHIZERS AND CULMINATED, 
FEBRUARY 2, 2002, IN A DISASTROUSLY FAILED ANTI-GOI ROME 
RALLY.  BEFORE A DIMINUTIVE CROWD OF 5,000, A BEVY OF DS AND 
DAISY LEADERS HEARD THEMSELVES DENOUNCED AS FAILURES BY FILM 
DIRECTOR/DS ACTIVIST NANNI MORETTI, WHO CALLED ON THEM TO 
STEP ASIDE. 
 
                       UNCLASSIFIED 
 
PAGE 04        ROME  01744  02 OF 05  081356Z 
10. COMPOUNDING DS/DAISY LEADERS' MISFORTUNES, RANK-AND-FILE 
SUPPORTERS ARE INCLINED TO SEEK INSPIRATION AND DIRECTION 
OUTSIDE THE PARTIES' STRUCTURE.  THE CGIL, WITH 5.4 MILLION 
MEMBERS, IS ITALY'S LARGEST TRADE UNION CONFEDERATION.  ONCE 
SEEN AS THE PCI'S "TRANSMISSION BELT," ITS TRANSFORMATION 
INTO A PROFESSIONAL, FULLY AUTONOMOUS TRADE UNION INSTITUTION 
WAS COMPLETED UNDER CHARISMATIC SECRETARY GENERAL SERGIO 
COFFERATI.  THE EMERGENCE OF A UNITED, POWERFUL CENTER-RIGHT, 
COMBINED WITH DISINTEGRATION ON THE CENTER-LEFT, CONVINCED 
COFFERATI THE CGIL COULD NOT REMAIN A DISINTERESTED OBSERVER. 
BREAKING RANKS WITH COLLEAGUE/COMPETITOR TRADE UNION 
CONFEDERATIONS CISL AND UIL (WHICH OPPOSED BUT WERE PREPARED 
TO DEAL WITH THE BERLUSCONI GOVERNMENT), THE CGIL UNDER 
COFFERATI ASSUMED A DE FACTO, IF EXTRA-PARLIAMENTARY 
OPPOSITION ROLE (REF A).  WHILE FOCUSED ON INTRANSIGENTLY 
OPPOSING ELEMENTS IN THE GOI'S LABOR LAW REFORM PACKAGE, 
COFFERATI/THE CGIL VENTURED CRITICISM OF THE GOI ON MATTERS 
AS VARIED AS THE GOVERNMENT'S EDUCATION POLICY AND ITS 
ALLEGED "ANTI-EUROPEAN" OUTLOOK. 
 
EUROPEAN DEMOCRACY: NOT ALL MEN (OR WOMEN) ARE CREATED EQUAL 
--------------------------------------------- --------------- 
11. ONCE UPON A TIME A KING AND QUEEN OCCUPIED THE ROME 
PALACE FROM WHERE POPES HAD RULED MUCH OF ITALY.  THEY SAT AT 
THE TOP OF A SOCIAL/POLITICAL/ECONOMIC SYSTEM LADDER, 
ACCOMPANIED BY PRINCES, PRINCESSES, COUNTS, BISHOPS, AND 
OTHER BEINGS OF LESSER RANK AND PRIVILEGE.  THEY PERPETUATED, 
 
                       UNCLASSIFIED 
 
                           UNCLASSIFIED     PTQ7928 
 
PAGE 01        ROME  01744  03 OF 05  081357Z 
ACTION DRL-02 
 
INFO  LOG-00   NP-00    AID-00   A-00     CA-01    CCO-00   CEA-01 
      CIAE-00  COME-00  CTME-00  INL-00   DODE-00  ITCE-00  ANHR-00 
      WHA-00   SRPP-00  DS-00    EB-00    EXME-00  EUR-00   E-00 
      UTED-00  VC-00    FRB-00   OBO-00   H-01     TEDE-00  INR-00 
      ITC-01   LAB-01   L-00     VCE-00   M-00     AC-01    DCP-01 
      NSAE-00  NSCE-00  OCS-03   OMB-01   OPIC-01  OPR-01   PA-00 
      PC-01    PM-00    PRS-00   ACE-00   P-00     SCT-00   SP-00 
      IRM-00   SSO-00   STR-00   TEST-00  TRSE-00  USIE-00  USSS-00 
      R-00     PMB-00   DSCC-00  G-00     NFAT-00  SAS-00     /016W 
                  ------------------80AAE2  081357Z /38 
R 081306Z APR 02 
FM AMEMBASSY ROME 
TO SECSTATE WASHDC 3152 
INFO EUROPEAN POLITICAL COLLECTIVE 
DEPT OF LABOR WASHDC 
AMCONSUL FLORENCE 
AMCONSUL MILAN 
AMCONSUL NAPLES 
 
UNCLAS SECTION 03 OF 05 ROME 001744 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ELAB, PGOV, IT 
SUBJECT: TWO DEMONSTRATIONS DOWN, ONE GENERAL STRIKE TO GO 
 
IN SUM, A SYSTEM AND SET OF ATTITUDES IN ITALY THAT HAD 
REMAINED MUCH THE SAME SINCE THE DAYS OF THE ROMAN EMPIRE. 
                       UNCLASSIFIED 
 
PAGE 02        ROME  01744  03 OF 05  081357Z 
 
12. THE KING AND QUEEN LEFT IN JUNE 1946.  THEY WERE VOTED 
OUT BY POPULAR REFERENDUM.  THE REST OF THE SYSTEM STAYED. 
IT DIDN'T STAY UNALTERED, BUT CHANGES - PROVOKED BY MILITARY 
DEFEAT AND FOREIGN OCCUPATION IN WORLD WAR II - CAME SLOWLY. 
THE FIRST ARTICLE OF THE NEW REPUBLIC'S CONSTITUTION, 
PROMULGATED IN DECEMBER 1947, PROCLAIMED ITALY A DEMOCRATIC 
REPUBLIC, "FOUNDED ON LABOR."  INDUSTRIAL GROWTH AND ECONOMIC 
RECOVERY IN NORTHERN ITALY HELPED THE TRADE UNIONS GAIN 
STRENGTH AND, WITH THE PASSAGE OF TIME, THEY BECAME SOLIDLY 
ROOTED INSTITUTIONS.  ALTHOUGH THE WORKERS THEY REPRESENTED 
HAD NO CONTRACTUALLY EQUAL "EMPLOYERS" TO DEAL WITH, THE 
UNIONS USED COLLECTIVE BARGAINING NEGOTIATIONS TO ACHIEVE 
ECONOMIC GAINS FROM THEIR "GIVERS OF WORK" ("DATORI DI 
LAVORO" IN ITALIAN).  POLITICAL GAINS CAME AS A RESULT OF THE 
UNIONS' LINKS TO POLITICAL PARTIES: CGIL AND PCI, CISL AND 
DC, UIL AND THE SOCIALISTS.  UNION GAINS CULMINATED WITH 
PASSAGE IN 1970 OF ITALIAN LABOR'S MAGNA CARTA - THE WORKERS 
STATUTE.  TITLE I OF THAT DOCUMENT HAD 13 ARTICLES "ON THE 
WORKER'S DIGNITY AND FREEDOM."  THESE COVERED MATTERS SUCH AS 
THE WORKER'S RIGHT TO EXPRESS OPINIONS IN THE WORKPLACE AND 
TO ENJOY DUE PROCESS IN DISCIPLINARY PROCEEDINGS.  TITLE I 
ALSO PROHIBITED EMPLOYERS FROM USING SECURITY GUARDS TO 
HASSLE WORKERS OR MONITORING THEM WITH AUDIO-VISUAL EQUIPMENT 
AND FORBADE SUBJECTING EMPLOYEES TO ROUTINE PHYSICAL SEARCHES 
OR MEDICAL INVESTIGATIONS.  THE STATUTE'S TITLE II ("ON TRADE 
UNION LIBERTIES") INCLUDED AN ARTICLE 18 ON JOB 
REINSTATEMENT.  THIS PROHIBITED FIRMS EMPLOYING MORE THAN 15 
WORKERS FROM FIRING AN INDIVIDUAL WORKER WITHOUT "JUST 
CAUSE."  WORKERS DETERMINED BY THE COURTS TO HAVE BEEN FIRED 
WITHOUT JUST CAUSE WERE ENTITLED TO GET THEIR OLD JOB BACK. 
                       UNCLASSIFIED 
 
PAGE 03        ROME  01744  03 OF 05  081357Z 
 
13. THE 1990'S ELEVATED THE UNIONS TO A NEW LEVEL OF NATIONAL 
PROMINENCE.  THE COLLAPSE OF THE GOVERNING PARTIES UNDER THE 
IMPACT OF "CLEAN HANDS" JUDICIAL INVESTIGATIONS CREATED A 
POWER VACUUM IN PARLIAMENT AND WORSENED THE COUNTRY'S ALREADY 
DIFFICULT ECONOMIC SITUATION.  A TRANSITIONAL GOVERNMENT 
UNDER THEN PRIME MINISTER GIULIANO AMATO APPEALED TO 
EMPLOYERS AND UNIONS FOR HELP.  DISCUSSIONS BEGUN IN 1992 LED 
TO FORMAL SIGNING IN 1993 OF THE FIRST "SOCIAL PACT," A 3-WAY 
ARRANGEMENT AMONG GOVERNMENT, EMPLOYERS, AND UNIONS THAT, FOR 
THE FIRST TIME IN ITALY'S HISTORY, SAW WORKER REPRESENTATIVES 
SEATED AT THE COUNTRY'S ECONOMIC/SOCIAL POLICY DECISION- 
MAKING TABLE.  POLICY DECISIONS TAKEN BY CONSENSUS BUILDING 
("CONCERTAZIONE" IN ITALIAN) HELPED STABILIZE THE COUNTRY 
POLITICALLY AND ECONOMICALLY FOR THE REST OF THE DECADE. 
 
NO ONE HAS A MONOPOLY ON MISSTEPS 
--------------------------------- 
14. "CONCERTAZIONE" WORKED BUT COULDN'T LAST.  PROFESSIONAL 
POLITICIANS PAID LIP SERVICE BUT, IN THEIR HABITS, WERE 
WEDDED TO EXERCISING POWER (WHEN THEY COULD) BY THEMSELVES. 
THE EMERGENCE AFTER MAY 2001 ELECTIONS OF GOVERNMENT BASED ON 
A STABLE PARLIAMENTARY MAJORITY MEANT THE UNIONS' 
PARTICIPATION IN SOCIAL/ECONOMIC POLICYMAKING WAS NO LONGER 
REQUIRED.  THE CORRESPONDING LEADERSHIP IMPLOSION OF PARTIES 
ON THE CENTER-LEFT MEANT THE UNIONS NOW HAD NEITHER A SEAT AT 
THE DECISION-MAKING TABLE NOR A COHERENT OPPOSITION 
INTERMEDIARY IN PARLIAMENT.  THEIR OPTIONS INVOLVED DIRECT 
NEGOTIATION WITH THE GOI (PREFERRED CHOICE OF CISL AND UIL) 
OR OPPOSING IT THROUGH STRIKES AND DEMONSTRATIONS (CGIL). 
 
                       UNCLASSIFIED 
 
PAGE 04        ROME  01744  03 OF 05  081357Z 
15. ONE OF THE BERLUSCONI GOVERNMENT'S MAIN OBJECTIVES - AS 
HAD BEEN THE CASE WITH CENTER-LEFT GOVERNMENTS BEFORE IT - 
WAS TO STIMULATE, MODERNIZE, AND IMPROVE THE COMPETITIVENESS 
OF THE ITALIAN ECONOMY.  DURING THE ELECTORAL CAMPAIGN, 
BERLUSCONI PROMISED BETTER PENSIONS FOR WORKERS, LOWER TAX 
BURDENS FOR EMPLOYERS, AND MORE JOBS FOR EVERYONE.  ACHIEVING 
THESE OBJECTIVES REQUIRED CHANGES IN ITALIAN LABOR LAW. 
AMONG OTHER THINGS, BERLUSCONI PROPOSED DECREASING WORKER 
DEPENDENCE ON ITALY'S PRECARIOUS GOVERNMENT SOCIAL SECURITY 
SYSTEM ("INPS") BY PROVIDING INCENTIVES FOR WORKERS AND 
EMPLOYERS TO DIVERT A PORTION OF THEIR INPS PAYMENTS INTO 
MARKET-LINKED PRIVATE PENSION FUNDS.  HE ALSO PROPOSED 
INCENTIVES FOR FIRMS TO INVEST (AND CREATE NEW JOBS) IN 
ITALY'S HIGH-UNEMPLOYMENT SOUTH.  GIVEN HIS FOCUS ON 
PROMOTING EXPORTS, BERLUSCONI DECIDED TO ASSUME THE FOREIGN 
MINISTRY PORTFOLIO HIMSELF AFTER THEN-FOREIGN MINISTER RENATO 
RUGGIERO "RESIGNED" IN JANUARY 2002, OVERSEEING THAT 
MINISTRY'S ASSUMPTION OF A "FOREIGN COMMERCIAL SERVICE" ROLE 
IT PREVIOUSLY HAD SHUNNED. 
 
16. THE PROBLEMS UNIONS HAVE WITH GOI PROPOSALS DO NOT 
INVOLVE FUNDAMENTAL IDEOLOGICAL DIVERGENCE OVER OBJECTIVES. 
HAVING ASSUMED THE ROLE OF THE GOVERNMENT'S SEVEREST CRITIC, 
COFFERATI FELT COMPELLED (JUNE 2001) TO STRESS THE CGIL WOULD 
NOT OPPOSE THE GOVERNMENT FOR OPPOSITION'S SAKE BUT WOULD 
TAILOR RESPONSES TO GOVERNMENT ACTIONS.  THE CGIL'S RESPONSE 
TO GOI PROPOSALS NEVERTHELESS WAS HOSTILE AND, AS TIME 
 
                       UNCLASSIFIED 
 
                           UNCLASSIFIED     PTQ7930 
 
PAGE 01        ROME  01744  04 OF 05  081357Z 
ACTION DRL-02 
 
INFO  LOG-00   NP-00    AID-00   A-00     CA-01    CCO-00   CEA-01 
      CIAE-00  COME-00  CTME-00  INL-00   DODE-00  ITCE-00  ANHR-00 
      WHA-00   SRPP-00  DS-00    EB-00    EXME-00  EUR-00   E-00 
      UTED-00  VC-00    FRB-00   OBO-00   H-01     TEDE-00  INR-00 
      ITC-01   LAB-01   L-00     VCE-00   M-00     AC-01    DCP-01 
      NSAE-00  NSCE-00  OCS-03   OMB-01   OPIC-01  OPR-01   PA-00 
      PC-01    PM-00    PRS-00   ACE-00   P-00     SCT-00   SP-00 
      IRM-00   SSO-00   STR-00   TEST-00  TRSE-00  USIE-00  USSS-00 
      R-00     PMB-00   DSCC-00  G-00     NFAT-00  SAS-00     /016W 
                  ------------------80AAEB  081357Z /38 
R 081306Z APR 02 
FM AMEMBASSY ROME 
TO SECSTATE WASHDC 3153 
INFO EUROPEAN POLITICAL COLLECTIVE 
DEPT OF LABOR WASHDC 
AMCONSUL FLORENCE 
AMCONSUL MILAN 
AMCONSUL NAPLES 
 
UNCLAS SECTION 04 OF 05 ROME 001744 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ELAB, PGOV, IT 
SUBJECT: TWO DEMONSTRATIONS DOWN, ONE GENERAL STRIKE TO GO 
 
PASSED, THE CONTRAST BETWEEN ITS STANCE AND THAT OF WILLING- 
TO-DEAL CISL AND UIL SHARPENED. 
                       UNCLASSIFIED 
 
PAGE 02        ROME  01744  04 OF 05  081357Z 
 
17. THINGS CHANGED IN NOVEMBER.  IN PRESENTING LABOR LAW 
PROPOSALS TO PARLIAMENT, THE GOI DOUBLY OFFENDED ALL THREE 
CONFEDERATIONS.  ITS FIRST OFFENSE INVOLVED SEEKING 
AUTHORIZATION ("DELEGA") TO EFFECT SOME LABOR MARKET REFORMS 
ON THE BASIS OF GENERAL GUIDELINES APPROVED BY PARLIAMENT, 
I.E., WITHOUT VETTING THEM FIRST, VIA "CONCERTAZIONE," WITH 
THE UNIONS.  ITS SECOND OFFENSE INVOLVED PROPOSALS TO SUSPEND 
ARTICLE 18 IN CASES INVOLVING (A) ENCOURAGEMENT FOR SMALL 
FIRMS TO GROW (AND CROSS THE 15-WORKER THRESHOLD), (B) 
INDUCEMENT FOR FIRMS OPERATING IN THE INFORMAL ECONOMY TO 
LEGALIZE THEIR STATUS, AND (C) TRANSFORMING SHORT-TERM LABOR 
CONTRACTS INTO "PERMANENT" EMPLOYMENT.  FOR THE UNIONS, THIS 
REPRESENTED AN UNACCEPTABLE GOVERNMENT ATTACK ON A BASIC 
WORKER RIGHT, ONE TO BE RESISTED AT ALL COSTS. 
 
18. THE GOI DID NOT RETREAT, BUT NEITHER DID IT PRESS MATTERS 
IN PARLIAMENT.  THE DEBATE CONTINUED INSTEAD VIA MEDIA 
STATEMENTS AND CONFLICTING SIGNALS FROM ELEMENTS IN THE 
GOVERNMENT COALITION.  BY THE TIME THE CGIL'S SCHEDULED 
QUADRENNIAL CONGRESS MET IN RIMINI (2/6-9), "GENERAL STRIKE" 
TALK WAS IN THE AIR.  INVITED GUEST SPEAKER LUIGI ANGELETTI 
(SECRETARY GENERAL OF UIL) COUNSELED CAUTION.  THINGS HAD 
CHANGED, HE SAID, WITH THE ELECTION OF A SAFE-MAJORITY 
GOVERNMENT.  THE UNIONS COULD NOT FORCE A GOVERNMENT CHANGE 
BY TAKING TO THE STREETS OR STRIKING, BUT THEY COULD CHANGE 
GOVERNMENT POLICY BY WORKING ON PUBLIC OPINION.  INVITED 
SPEAKER SAVINO PEZZOTTA (SECRETARY GENERAL OF CISL) AGREED. 
"SO WE STRIKE," HE SAID; "WHAT DO WE DO THE DAY AFTER?" 
 
19. THE UIL HELD ITS OWN QUADRENNIAL CONGRESS A MONTH LATER 
                       UNCLASSIFIED 
 
PAGE 03        ROME  01744  04 OF 05  081357Z 
(3/4-6).  BY THEN, THE CGIL HAD ANNOUNCED PLANS FOR A GENERAL 
STRIKE APRIL 5.  INVITED GUEST SPEAKER COFFERATI DREW 
APPLAUSE UNTIL HE TRIED TO JUSTIFY WHAT, FOR UIL DELEGATES, 
WAS UNJUSTIFIABLE - CGIL UNILATERALISM.  THE CGIL HAD DECIDED 
ALONE, COFFERATI EXPLAINED, BECAUSE "CONDITIONS DIDN'T EXIST" 
FOR THE CONFEDERATIONS TO DECIDE JOINTLY.  LOUD WHISTLES 
RESOUNDED.  SOME WHISTLES ALSO SOUNDED WHEN GUEST SPEAKER 
(LABOR MINISTER) ROBERTO MARONI SPOKE.  HOWEVER, MORE-THAN- 
POLITE APPLAUSE GREETED HIS ANNOUNCEMENT THE GOI HAD "HEARD" 
LABOR'S DETERMINED PROTEST AND WAS REOPENING THE DOOR TO 
NEGOTIATIONS.  THE APPROACHING CONFLICT, IT SEEMED, WAS OVER. 
 
20. IT WASN'T.  "COFFERATI WINS," PROCLAIMED LEFTIST MEDIA. 
CGIL INTRANSIGENCE HAD WON THE DAY - THE GOI HAD ABANDONED 
THE FIELD.  GOI REACTION WAS SWIFT.  IT WOULD PROCEED, AN 
UNCHARACTERISTICALLY HARSH BERLUSCONI ANNOUNCED, WITH PLANS 
TO CHANGE ARTICLE 18.  THE CGIL ANNOUNCED PLANS FOR AN ANTI- 
BERLUSCONI ROME RALLY 3/23.  UIL AND CISL ENDORSED A GENERAL 
STRIKE AND SAID THEY WOULD AIM FOR A DATE IN COMMON WITH THE 
CGIL.  WITH TENSION MOUNTING, RED BRIGADE TERRORISTS STRUCK, 
ASSASSINATING LABOR MINISTRY ADVISER MARCO BIAGI 3/19 (REFS C 
AND D).  FOR SOME, THIS HAD A SOBERING EFFECT.  THE CGIL 
RALLY, WHICH BROUGHT OVER A MILLION PEOPLE TO ROME'S CIRCUS 
MAXIMUS AND VICINITY, ADDED SUPPORT FOR DEMOCRACY AND 
REPUDIATION OF VIOLENCE TO ITS GOVERNMENT PROTEST AGENDA. 
CGIL JOINED CISL AND UIL IN MOUNTING A NATIONWIDE ANTI- 
TERRORIST PROTEST 3/27.  BUT IN THE MEANTIME LOOSE CANNONS 
FIRED FROM THE GOVERNMENT'S RANKS.  ONE MINISTER CALLED THE 
3/23 RALLY A "THREAT TO DEMOCRACY;" ANOTHER (BOSSI) SAID 
TERRORISTS WERE "THE CHILDREN" OF LABOR PROTESTS.  HAVING 
THEMSELVES BEEN IN TERRORIST GUNSIGHTS DURING ITALY'S 1970'S- 
                       UNCLASSIFIED 
 
PAGE 04        ROME  01744  04 OF 05  081357Z 
1980'S "YEARS OF LEAD," UNION LEADERS EXPLODED.  PUTTING 
ASIDE THEIR DIFFERENCES, CGIL, CISL, AND UIL SET 4/16 AS 
THEIR COMMON GENERAL STRIKE DAY.  THE UGL, A FOURTH NATIONAL 
TRADE UNION CONFEDERATION GENERALLY SYMPATHETIC TO FINI'S 
CONSERVATIVE AN, JOINED THE 4/16 GENERAL STRIKE CALL. 
BERLUSCONI DISTANCED HIMSELF FROM HIS MINISTERS' STATEMENTS 
WHICH, HE SAID, DID NOT REPRESENT HIS GOVERNMENT'S VIEWS. 
USING CONCILIATORY LANGUAGE, HE AND MARONI REITERATED THE 
GOI'S OBJECTIVE OF CHANGING ARTICLE 18 BUT INVITED THE UNIONS 
TO RESUME DIALOGUE. 
 
AFTER THE GENERAL STRIKE: GROUNDS FOR PRAGMATISM 
--------------------------------------------- --- 
21. ITALIANS HAVE SOME SERIOUS ISSUES TO DEAL WITH, AMONG 
THEM JOB CREATION, IMMIGRATION, ASSURING RETIREMENT BENEFITS, 
WORKER SKILLS TRAINING/UPGRADING, INCREASING/EXTENDING 
UNEMPLOYMENT BENEFITS, STIMULATING INVESTMENT.  THESE ARE 
ISSUES IN WHICH GOVERNMENT, UNIONS, AND EMPLOYERS ALL HAVE A 
STAKE; THEY'RE NOT MATTERS THAT EASILY LEND THEMSELVES TO 
RESOLUTION BY IDEOLOGY.  IN THE FINAL ANALYSIS, REASONABLE 
AND PRAGMATIC GOI, BUSINESS, AND UNION OFFICIALS ARE LIKELIER 
TO FORM THEIR POSITIONS ON THE BASIS OF ECONOMIC DATA THAN ON 
IDEOLOGICAL PRINCIPLE.  FOR ALL THE DRAMA ATTENDING THEIR 
DISPUTE OVER ARTICLE 18, LEADERS SUCH AS BERLUSCONI, FINI, 
COFFERATI, PEZZOTTA, AND ANGELETTI ARE PRAGMATIC MEN, HEADING 
PRAGMATIC ORGANIZATIONS.  THE ANSWER TO SECRETARY GENERAL 
PEZZOTTA'S QUESTION ("WHAT DO WE DO THE DAY AFTER") IS, 
 
                       UNCLASSIFIED 
 
                           UNCLASSIFIED     PTQ7932 
 
PAGE 01        ROME  01744  05 OF 05  081357Z 
ACTION DRL-02 
 
INFO  LOG-00   NP-00    AID-00   A-00     CA-01    CCO-00   CEA-01 
      CIAE-00  COME-00  CTME-00  INL-00   DODE-00  ITCE-00  ANHR-00 
      WHA-00   SRPP-00  DS-00    EB-00    EXME-00  EUR-00   E-00 
      UTED-00  VC-00    FRB-00   OBO-00   H-01     TEDE-00  INR-00 
      ITC-01   LAB-01   L-00     VCE-00   M-00     AC-01    DCP-01 
      NSAE-00  NSCE-00  OCS-03   OMB-01   OPIC-01  OPR-01   PA-00 
      PC-01    PM-00    PRS-00   ACE-00   P-00     SCT-00   SP-00 
      IRM-00   SSO-00   STR-00   TEST-00  TRSE-00  USIE-00  USSS-00 
      R-00     PMB-00   DSCC-00  G-00     NFAT-00  SAS-00     /016W 
                  ------------------80AAF5  081357Z /38 
R 081306Z APR 02 
FM AMEMBASSY ROME 
TO SECSTATE WASHDC 3154 
INFO EUROPEAN POLITICAL COLLECTIVE 
DEPT OF LABOR WASHDC 
AMCONSUL FLORENCE 
AMCONSUL MILAN 
AMCONSUL NAPLES 
 
UNCLAS SECTION 05 OF 05 ROME 001744 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ELAB, PGOV, IT 
SUBJECT: TWO DEMONSTRATIONS DOWN, ONE GENERAL STRIKE TO GO 
 
"WE'LL TALK SOME MORE." 
 
                       UNCLASSIFIED 
 
PAGE 02        ROME  01744  05 OF 05  081357Z 
22. THEY'LL TALK ABOUT ARTICLE 18'S REAL RELATIONSHIP TO JOB 
PROTECTION AND INCREASING EMPLOYMENT.  THE ARTICLE "PROTECTS" 
WORKERS IN FIRMS WITH MORE THAN 15 EMPLOYEES FROM BEING 
UNJUSTLY FIRED.  COURTS CAN ORDER WORKERS SO FIRED TO BE 
REINSTATED.  WHILE THE SIZE OF MOST ITALIAN FIRMS (PERHAPS 7 
OUT OF 8) PUTS THEM BELOW THIS CUTOFF, MOST EMPLOY ONLY 5, 6, 
OR 7 WORKERS, I.E., THEY COULD DOUBLE IN SIZE AND STILL NOT 
CROSS THE 15-WORKER THRESHOLD (AND THUS BE AFFECTED BY THE 
GOI'S PROPOSED CHANGES).  OF WORKERS WHO WERE "PROTECTED" BY 
ARTICLE 18 IN 2001, PERHAPS 100 WON CASES IN COURT; MOST 
OPTED FOR COMPENSATION RATHER THAN REINSTATEMENT IN THEIR OLD 
POSITION.  HOWEVER, WHATEVER PROTECTION OPTION THEY CHOSE IS 
LIKELY TO HAVE COME AT A PRICE - LONG MONTHS, PERHAPS YEARS, 
OF CASES PROCESSING THROUGH ITALY'S NOTORIOUSLY SLOW COURTS. 
THE GOI AND UNIONS ARE BOTH NOW TALKING ABOUT "MEDIATION" AND 
"ARBITRATION" - A LIKELY FOCUS FOR FURTHER DISCUSSION. 
 
23. ITALY'S NATIONAL UNEMPLOYMENT RATE IS AN UNSATISFACTORY 
9.2 PERCENT.  BUT THIS IS AN ARTIFICIAL FIGURE, ONE THAT 
HIDES LOW 3.9 PERCENT REGIONAL UNEMPLOYMENT IN THE NORTH 
(WHERE SKILLS SHORTAGES ARE GROWING) AND HIGH 18.8 PERCENT 
UNEMPLOYMENT IN THE SOUTH.  UNEMPLOYMENT IN ITALY'S DYNAMIC 
NORTHEAST STANDS AT 3.5 PERCENT (JOBS THERE HAVING GROWN 2.2 
PERCENT IN 2001).  THIS EMPLOYMENT GROWTH CONTINUES A TREND 
BEGUN IN 1998, WHEN "ATYPICAL" JOB CONTRACTS (I.E., FOR PART 
TIME AND TEMPORARY WORK) WERE LEGALIZED AND PRIVATE 
EMPLOYMENT AGENCIES SUCH AS "MANPOWER" BEGAN OPERATING. 
ALTHOUGH THE UNIONS FEARED EMPLOYERS WOULD USE "ATYPICAL" 
CONTRACTS AT THE EXPENSE OF "PERMANENT" JOBS, NEW "PERMANENT" 
JOBS ACCOUNTED FOR MOST EMPLOYMENT GROWTH IN 2001 AND, AT 
MANPOWER, APPROXIMATELY 30 PERCENT (AND, IN PLACES, UP TO 45 
                       UNCLASSIFIED 
 
PAGE 03        ROME  01744  05 OF 05  081357Z 
PERCENT) OF WORKERS PLACED IN TEMPORARY JOBS WERE CONVERTED 
TO PERMANENT STATUS.  THE GOI AND UNIONS WILL HAVE TO 
CONSIDER WHY THE ARTICLE 18 BARRIER TO EMPLOYMENT GROWTH, IF 
THAT'S WHAT IT IS, PRODUCES SUCH DISPARATE EFFECTS. 
 
24. IF IDEOLOGY PLAYS A ROLE IN UNION/GOVERNMENT DISCUSSIONS, 
IT'S LIKELY TO BE THE IDEOLOGY OF A PART OF THE GOI'S AN 
COMPONENT, THE "SOCIAL RIGHT."  THIS "RIGHT" DOES NOT HAVE A 
THATCHERITE GOAL OF SMASHING UNIONS; ITS PATERNALISTIC 
CONCERN IS THE "PROTECTION" OF WORKERS, A CONCERN MANIFESTED 
IN CLOSE TIES WITH TRADE UNION CONFEDERATION UGL.  THEIR 
VOICES, URGING CAUTION FROM WITHIN THE GOI, ARE FINDING ECHO 
AMONG AT LEAST SOME BUSINESSMEN OUTSIDE WHO SEE NOTHING TO 
GAIN FROM GOI/UNION CONFLICT.  A PRAGMATIC BERLUSCONI GOI 
BENT ON MODERNIZING/GOVERNING ITALY WILL VOTE CHANGES INTO 
LAW - BUT ONLY AFTER MUCH MORE TALKING WITH THE UNIONS. 
 
                       UNCLASSIFIED 
 
> 
 2002ROME01744 - Classification: UNCLASSIFIED