US embassy cable - 05ROME1409

UNCLAS  ROME 001409 
 
SIPDIS 
 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PGOV, PREL, PINR, IT, ITALIAN POLITICS 
SUBJECT:  ITALY:  BERLUSCONI III SWORN IN; LIKELY TO BE 
CONFIRMED THIS WEEK 
 
REF:  A) ROME 1291, B) 04 ROME 2630 
 
1.  (U)  SENSITIVE BUT UNCLASSIFIED -- NOT FOR INTERNET 
DISTRIBUTION. 
 
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SUMMARY 
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2.  (SBU)  A new Berlusconi Cabinet was sworn in by 
President of the Republic Ciampi on April 23.  If confirmed 
as expected by both chambers of Parliament, this will be 
Berlusconi's third government, counting his seven-month 
stint in 1994 and the just-expired term that made him 
Italy's longest-serving post-War Prime Minister.  The new 
Cabinet shows few changes.  It includes the four major 
coalition partners of Berlusconi II -- the PM's own Forza 
Italia (FI), National Alliance (AN), Union of Christian 
Democrats of the Center (UDC) and the Northern League 
(Lega).  The Cabinet also draws in two micro-parties, the 
New Italian Socialists (New PSI) and the Italian Republicans 
(PRI), which were associated with this coalition throughout 
most of the previous government, but in this line-up have 
one ministry each.  If pressure on Berlusconi to resign by 
AN and UDC was intended to reduce the Northern League's 
influence, there are few signs from Cabinet appointments 
that this played out.  We do not foresee any dramatic 
changes in the policies of most concern to the USG when 
Berlusconi presents his government program to Parliament on 
April 26.  Septel will report on what the Government change 
means for Berlusconi's economic policies.  END SUMMARY. 
 
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THE NEW GOVERNMENT LINE-UP 
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3.  (U)  The government sworn in on April 23 looks much like 
the one it replaces: 
 
Silvio Berlusconi (FI), Prime Minister 
Gianfranco Fini (AN), Deputy Prime Minister (and Foreign 
Minister) 
Giulio Tremonti (FI), Deputy Prime Minister (replaced Marco 
Follini, UDC) 
 
MINISTERS WITH PORTFOLIO: 
 
Gianfranco Fini (AN), Foreign Affairs 
Giuseppe Pisanu (FI), Interior 
Roberto Castelli (Lega), Justice 
Antonio Martino (FI), Defense 
Domenico Siniscalco (Independent), Economics and Finance 
Claudio Scajola (FI), Productive Activities (replaced 
Antonio Marzano, FI) 
Letizia Moratti (Independent), Education, University and 
Scientific Research 
Roberto Maroni (Lega), Labor and Welfare 
Giovanni Alemanno (AN), Agricultural Affairs and Forests 
Altero Matteoli (AN), Environment 
Pietro Lunardi (Independent), Infrastructure and Transport 
Francesco Storace (AN), Health (replaced Gerolamo Sirchia, 
Independent) 
Rocco Buttiglione (UDC), Cultural Assets and Activities 
(replaced Giuliano Urbani, FI) 
Mario Landolfi (AN), Communications (replaced Maurizio 
Gasparri, AN) 
 
MINISTERS WITHOUT PORTFOLIO: 
 
(Note:  Ministers without Portfolio have no independent 
budget and little staff.  They are created on an ad hoc 
basis by the sitting Council of Ministers.) 
 
Roberto Calderoli (Lega), Institutional Reform and 
Devolution 
Giorgio La Malfa (PRI), European Union Policy (replaced 
Buttiglione, UDC, who was "promoted" to the Culture 
Ministry) 
Stefano Caldoro (New PSI), Implementation of Government 
Programs (replaced Claudio Scajola, FI, who was "promoted" 
to Productive Activities) 
Mario Baccini (UDC), Public Administration 
Enrico La Loggia (FI), Regional Affairs 
Carlo Giovanardi (UDC), Relations with Parliament 
Lucio Stanca (Independent), Innovation and Technology 
Stefania Prestigiacomo (FI), Equal Opportunities 
Mirko Tremaglia (AN), Italians Abroad 
Gianfranco Micciche' (FI), Development and Territorial Unity 
 
 
(new position) 
 
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THE TALLY 
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4.  (SBU)  AN, Berlusconi's largest partner in terms of 
votes (after FI, based on the 2001 national election vote 
count), retained the double hats of deputy prime minister 
and foreign minister for party leader Gianfranco Fini.  AN 
also secured the Health Ministry for party heavyweight 
Francesco Storace, who lost his re-election bid for Lazio 
regional president in the April 3-4 regional elections.  UDC 
(slightly ahead of Lega in terms of electoral weight within 
the coalition) kept its three previous ministers, with 
former Minister without Portfolio for European Union 
Policies Rocco Buttiglione "promoted" to a full Ministry 
(Culture).  UDC leader Marco Follini withdrew from his 
government role of Deputy Prime Minister, as he promised he 
would.  Seemingly at odds with AN and UDC demands, the 
Northern League kept all three of its ministries, including 
the all-important (to League voters) Minister for Reform.  A 
caustic observer might note that AN/UDC failed to break the 
coalition's "northern axis."  New allies, PRI and New PSI, 
secured one ministry each. 
 
5.  (SBU)  Most promotions or new appointments came at the 
expense of independent ministers or were swaps within a 
party.  One new minister without portfolio was created, that 
for Development and Territorial Integrity -- read "the 
South."  Berlusconi, however, succeeded in bringing back two 
key advisers especially important to him in electoral 
campaigns -- Claudio Scajola and Giulio Tremonti. 
Tremonti's appointment as Deputy Prime Minister alongside 
Fini counts also as a plus for the League, but as a possible 
affront to AN (see below).  After assigning Productive 
Activities to key FI confidante Claudio Scajola, we expect 
Berlusconi to reward his quietly exiting loyal follower 
Antonio Marzano with some other appointment, likely within 
the party.  The Scajola appointment, too, must have been the 
subject of intense bargaining; most sources suggested AN 
wanted this ministry for its own. 
 
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NEW (RE-)ENTRIES 
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6.  (SBU)  Tremonti, one of Berlusconi's most trusted allies 
and a senior leader of FI, is an economic and tax expert. 
Berlusconi may have had to overcome Fini's objections to 
name Tremonti deputy prime minister.  Tremonti was forced to 
resign as Minister of Economics and Finance in July 2004 
after a showdown with Fini, who accused Tremonti of 
monopolizing economic policy decision-making and hiding the 
true state of Italy's public accounts (Ref B).  Tremonti is 
seen as a firm supporter of the Lega's devolution/government 
reform, which could again create friction with AN and UDC. 
 
7.  (SBU)  Storace, the new health minister, is co-leader 
with Agriculture Minister Alemanno of AN's "Social Right" 
(Destra Sociale) faction.  Social Right is AN's strongly 
populist wing, tending to support "big" government 
assistance to the voters.  It does not fully support Fini's 
leadership.  The appointment, however, cements Storace to 
the government, leaving him less room to maneuver against 
Fini from outside.  Although he entered politics at age 14, 
this is Storace's first cabinet post.  The new Minister said 
he would work to bring down the cost of medicine and to 
complete talks on the renewal of expired national contracts 
for health sector workers, including doctors. 
 
8.  (SBU)  The new post of Minister without Portfolio for 
Development and Territorial Unity is well suited for 
Gianfranco Micciche', FI Coordinator for Sicily.  In his 
most recent position of deputy finance minister, he was 
already responsible for southern Italy's economic 
development -- which begs the question why AN and UDC didn't 
demand a new face.  Micciche' is a strong promoter of 
policies for the underdeveloped south, however, and giving 
the topic ministerial attention is designed to reassure the 
two coalition partners of the premier's determination to do 
more for the region.  Micciche' told reporters that "this 
sends out an essential sign (to the south)... I represent a 
denial of those who spoke of a FI-Lega axis." 
 
9.  (SBU)  Mario Landolfi, former AN spokesman who replaces 
Maurizio Gasparri as Minister for Communications, is a 
relative light weight in the Cabinet, having been a working 
 
 
level contact for us thus far.  He is close to Fini, and he 
is also from Campania, in southern Italy. 
 
10.  (SBU)  Giorgio La Malfa, who replaced Buttiglione as EU 
Policies Minister, leads the small but relatively 
influential Italian Republican Party.  Born in Milan, La 
Malfa is close to Berlusconi and was elected to the Chamber 
of Deputies in 2001 on the FI ticket. 
 
11.  (SBU)  Stefano Caldoro, born in 1960, is almost 
certainly the youngest minister.  Formerly deputy minister 
for education, Caldoro is also a southerner.  He represents 
the miniscule New PSI. 
 
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COMMENT 
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12.  (SBU)  We expect the new Government to win relatively 
easy confirmation in confidence votes in the Chamber (likely 
late on April 27) and the Senate (expected April 28).  The 
policies of the new Berlusconi Government will be much like 
those of its predecessor, particularly on matters of most 
interest to Washington -- Iraq, Afghanistan, the war on 
terror.  In his presentation before Parliament on April 27, 
Berlusconi will have to show not only the voters, but 
perhaps more importantly coalition partners AN and UDC, that 
the Government recognizes their dissatisfaction with the 
state of the economy; this is likely to be the focus of the 
Prime Minister's speech.  (Septel will report on what the 
new Cabinet means for Berlusconi's economic program.) 
 
13.  (SBU)  While the center-right coalition parties have 
reconciled their differences to some degree, this alliance 
will be under strain from now until the next national 
elections.  We still expect elections to be in early 2006, 
given that the time for dissolving Parliament to hold 
elections in June is almost past.  (Italian law requires a 
45-day campaign period prior to an election.)  After June 
comes the sacred summer vacation season, and after that come 
fall budget negotiations, neither of which are auspicious 
for simultaneous national elections. 
SEMBLER 
 
 
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 2005ROME01409 - Classification: UNCLASSIFIED