US embassy cable - 05ROME1785

C O N F I D E N T I A L  ROME 001785 
 
SIPDIS 
 
 
E.O. 12958: DECL: 25X1-HUMAN 
TAGS: PGOV, ECON, IT, ITALY NATIONAL ELECTIONS 
SUBJECT: ITALY: CENTER RIGHT NEEDS DRASTIC CHANGES TO WIN, 
ACCORDING TO MOI TRADE VICE MINISTER URSO 
 
REF: ROME 1623 
 
Classified By: DCM EMIL SKODON, REASON 1.4 (D). 
 
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SUMMARY AND COMMENT 
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1.  (C)  Vice Minister of Productive Activities Adolfo Urso 
told the Ambassador May 16 that the center-right coalition 
seems destined for defeat in the next national elections 
unless it takes drastic measures soon. Urso believes a 
larger, more unified center-right party needs to be created, 
with a leader less polarizing than PM Berlusconi. Urso's 
preferred candidate to lead the new party would be Chamber of 
Deputies President Casini, who could potentially attract more 
supporters of the center-left than Urso's own party leader, 
Gianfranco Fini.  The Vice Minister said the onus is on 
Berlusconi to decide whether he wants to lead the 
center-right to defeat, something Urso believes is likely 
given Italy,s poor economic performance, which overshadows 
the government's accomplishments over the last four years. 
We believe many of Urso's colleagues may find his argument 
persuasive and could agree that the right might do well to 
select another leader, perhaps offering Berlusconi the 
Presidency.  Likewise, selecting the personable, attractive 
Casini to lead the right could well, as Urso suggested, put 
the center-left in disarray, making it rethink its choice of 
the prosaic Prodi and opening the coalition to internecine 
warfare among its leaders for heading the left's ticket.  END 
SUMMARY AND COMMENT. 
 
2.  (C)  The Ambassador's farewell call on Vice Minister of 
Productive Activities Adolfo Urso (who is responsible for 
Italian foreign trade policy) turned into a candid political 
discussion about the future of Italy,s center-right 
governing coalition.  Urso, a leading member of the National 
Alliance (AN, the second-largest party in the coalition) and 
an ally of Foreign Minister/Deputy Prime Minister/AN party 
leader Gianfranco Fini, told the Ambassador that the 
coalition needed to take two decisive steps if it hopes to 
win Italy,s next national elections:  1) a larger, united 
center-right political entity needed to be created, and 2) 
this new party needed a more attractive, less polarizing 
figure than PM Berlusconi to lead it to victory. 
 
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RIGHT NEEDS SINGLE CENTRIST PARTY... 
------------------------------------ 
 
3.  (C)  Urso envisioned an expanded center-right political 
party incorporating AN, Forza Italia (FI ) Berlusconi's 
party, the largest in the governing coalition) and the 
smaller, more centrist Union of Christian Democrats of the 
Center (UDC).  A larger, more cohesive party closer to the 
political center was needed in order to attract a larger 
percentage of the Italian electorate, Urso said.  Such a 
party needed to be firmly planted in the European tradition, 
with Christian roots and an Atlanticist orientation.  The 
party must also be national in scope, with a base throughout 
the country.  (Note:  AN and UDC have support throughout the 
country.  The constituencies of FI and remaining coalition 
partner Northern League are concentrated in northern Italy.) 
Urso rejected the possibility that Umberto Bossi's Northern 
League could be integrated within the new party, since it did 
not have a national orientation and would be viewed 
unfavorably by other mainstream center-right parties 
elsewhere in Europe, with which the new party would hope to 
be associated.  Urso did not exclude the formation of a 
political coalition between the new party and the League 
(among other parties), however. 
 
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...AND A NEW LEADER 
------------------- 
 
4.  (C)  Urso told us that he did not foresee Berlusconi's 
being able to lead the center-right to another victory in the 
next elections, unless the campaign focused on non-economic 
issues, which he thought unlikely.  Given his support to Fini 
within AN, Urso surprised us by saying he did not think the 
time was ripe for Fini to lead the center-right either.  Urso 
noted that, though Fini might attract more voters than 
Berlusconi, his presence at the head of the coalition would 
jeopardize its continued cohesion given the views of some of 
the smaller parties in the center-right.   (Comment:  We 
assume this was a reference to those who still dwell on AN's 
Fascist past.  Fini, with Urso's support, has moved AN toward 
the center, away from its dark ancestry.  Some years ago, it 
would have been anathema even to think of AN in a centrist 
grouping.  End Comment.) 
 
 
5.  (C)  Rather, in Urso's view, the most electable candidate 
to lead a new, larger center-right party was Pier Ferdinando 
Casini, the President of the Chamber of Deputies and former 
president of one of UDC's founding parties. Casini would be 
able to placate important political groupings, such as the 
Catholic church, while also appealing to centrist voters who 
have gravitated to the center-left because of their 
disaffection with Berlusconi.  Urso suggested that with 
Casini leading the center-right into the elections, the 
center-left would have second thoughts about the electability 
of its own current leader, former PM (and former European 
Commission President) Romano Prodi.  Urso asserted that a 
Casini candidacy would provoke a "crisis" in the center-left. 
 
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BUT WILL BERLUSCONI AGREE? 
-------------------------- 
 
6.  (C)  Berlusconi will have to decide whether he wants to 
lead the center-right to an apparent defeat next year, or 
swallow his pride and let another leader take over, according 
to Urso.  Berlusconi should welcome the creation of a larger 
party incorporating FI, Urso said, as the best way to ensure 
the survival of its ideals once Berlusconi passes from the 
political scene. Urso did not predict whether Berlusconi 
would step aside )- but he commented that the decision was 
Berlusconi's to make, as Urso could not envision either the 
creation of a larger center-right party or the advent of a 
new center-right leader unless Berlusconi were to acquiesce. 
Urso said the results of the May 16 elections in the Sicilian 
city of Catania would be a strong test for Berlusconi )- the 
loss of the FI candidate for mayor (Berlusconi's personal 
physician) in this FI stronghold would further weaken 
Berlusconi politically.  (Note:  Umberto Scapagnini, FI's 
physician mayor, handily retained his seat, leading 
Berlusconi to comment that the center-right "wins with me, 
but loses without me.") 
 
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WHAT THE GOVERNMENT HAS (AND HASN'T) ACCOMPLISHED 
--------------------------------------------- ---- 
 
7.  (C)  Urso lamented the current unpopularity of the 
governing coalition, despite much good that had been 
accomplished in the last four years.  He listed a more robust 
foreign policy and increased and more effective attention to 
defense and national security issues as well as attention to 
moral issues.  The government's prime failure was in not 
turning around the Italian economy.  Urso told the Ambassador 
that, in hindsight, after the September 11 terrorist attacks, 
the Berlusconi government (then just a few months old) should 
have declared a national economic emergency and implemented 
drastic reforms to jump-start economic conditions.  Instead, 
the government pinned its hopes on an eventual economic 
recovery, which occurred in many other parts of the world, 
but not in Europe.  (Recent statistics indicate Italy went 
into recession in the last quarter of 2004.)  If the upcoming 
electoral campaign revolves around Italy,s lackluster 
economy, as Urso predicts, the center-right seems destined to 
lose.  Another Berlusconi-led campaign might squeak back into 
power only if outside events divert the electorate's 
attention from the economy, he added. 
 
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CHINESE TEXTILES 
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8.  (C)  In addition to discussing Italian politics, the 
Ambassador also raised the issue of Chinese textile imports, 
noting the USG decision of May 13 to invoke safeguards on 
certain textile imports from China.  Urso, who has been among 
the most vocal European trade officials on the threat such 
imports post to European industry (Reftel), said he hoped the 
U.S. decision would help spur the European Commission to take 
final action soon.  (He acknowledged the fear that any 
closing of the U.S. market might push the Chinese to export 
more aggressively to Europe.)  Urso hoped that EU Trade 
Commissioner Mandelson would move the EU's own safeguards 
inquiry forward before the French vote on the EU constitution 
at the end of May, though he said he could not be sure 
Mandelson would do so. 
 
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COMMENT:  URSO MAY MAKE SENSE 
----------------------------- 
 
9.  (C)  Urso's analysis may seem dead on to many on the 
center-right.  It would take enormous effort by Berlusconi to 
recoup the personal popularity he has lost, not only from the 
center-right's setbacks in 2004 and 2005 balloting, but even 
 
 
more perhaps with his inability to carry through on the 
economic promises that were among his most appealing features 
to voters.  The dream of being rich like the self-made 
Berlusconi was a tremendous attraction to at least some 
Italians. 
 
10.  (C)  If the right is convinced Berlusconi cannot again 
lead it to victory, what would it take to persuade him to 
step aside?  The promise of the Presidency of the Republic 
might be an appropriate incentive; it is a position with 
great stature, normally reserved for an elder statesman.  To 
fulfill the promise, however, the coalition would need a very 
strong majority.  Normally, Parliament selects the President 
with at least a nod toward consensus among governing and 
opposition parties.  Berlusconi would never win support from 
the left, so the right would have to count on a solid and 
significant coalition.  That, however, might serve as a 
further enticement to the parties to work together to secure 
a significant electoral victory. 
 
11.  (C)  Casini is not necessarily the obvious 
standard-bearer for a new "center" center-right party -- 
although it is his dream to lead such a party.  UDC is only 
the third party in the current coalition, and its electoral 
results have done little beyond keeping the party in 
Parliament:  3.2% in 2001 national elections, 5.9% in 2004 
European Parliament elections, and 6.1% in 2005 regional 
voting.  While these results are not directly comparable to 
each other, they might suggest an upward trend or a move 
toward the center in the Italian electorate. 
 
12.  (C)  Casini may bring lower negatives than other 
potential right leaders.  Compared directly to AN's Fini, the 
more likely prospect in terms of electoral weight, Casini 
comes from the more neutral Christian Democratic past, viewed 
against the Fascist cloud which hovers distantly over Fini. 
Fini has worked intensely, and with considerable success, to 
push that cloud away, winning plaudits from Italian Jewish 
organizations and Israel, but World War II and Benito 
Mussolini may not be far enough away for some Italians, 
especially centrists and left-leaners, to accept him at the 
top of the ticket.  Besides the dream of being rich, 
Berlusconi and Forza Italia also offered Italians a fresh 
alternative to two discredited Italian pasts -- the Fascists, 
and the Christian Democrats (DC) brought down in 1990s 
corruption scandals.  If FI is now discredited, the young, 
handsome Casini, coming from the DC past, may be the more 
palatable return to the tried and true. 
 
13.  (C)  While routine center-left disarray has lately 
attracted less attention against the greater distraction of 
the center-right's implosion, the left coalition remains 
troubled.  The "Union" (the coalition led by Romano Prodi) 
did quite well in 2004 and 2005 voting, but in May 15-16 
local balloting in Sicily, Francesco Rutelli's Daisy, the 
most centrist party in the center-left coalition, gained a 
higher percentage of the vote than the larger Democrats of 
the Left (DS) in Catania (12.5% versus 5.5%), and pulled 
almost even in Enna (22.5% versus 24.3%).  This, combined 
with long-standing animosity between Prodi and Rutelli, and 
DS's history of incorporating smaller parties (which later 
lose their independent name, symbol -- and leadership 
positions), led Rutelli to move away from the left's unified 
electoral list.  Daisy has (for now) declared it will run its 
own ticket for proportional voting, although it would 
necessarily still run in a center-left coalition for majority 
seats.  Extrapolating a move to the center within the left, 
as well as the right, from these developments (a bit 
presumptuous), they could support Urso's contention that the 
electorate may be ready for a more centrist option in the 
next national elections. 
 
14.  (C)  Prodi's asset to the center-left is, ironically, 
his lack of charisma.   Not only does it soothe other 
potential center-left leaders, who can feel quietly superior, 
but it may work to his advantage in a contest with 
Berlusconi, who alienates many with his too-abundant 
personality.  In a contest with the personable Casini, 
however, the left may see Prodi's stolid, professorial 
demeanor fade in its appeal.  Thus, when Urso suggests a 
Casini candidacy could throw the left into disarray, we think 
he has a point.  The coalition does not have far to go to 
reach that state.  It is not automatic, however, that Casini 
would generate enthusiasm and guarantee turnout on the right 
end of the political spectrum, as did Berlusconi.  In a poll 
published April 30 in leftist La Repubblica, Fini 
consistently outscored Casini in a sampling of center-right 
voters.  Even among UDC voters, 52% listed Fini as the person 
"preferred to lead the Council of Ministers," compared to 33% 
for Casini and 53% for UDC Secretary Marco Follini. 
(Respondents apparently could give more than one name, as 
 
 
totals exceed 100%.)  Of course, the goal of a more centrist 
center-right party would be to attract new voters, beyond 
those already committed to the center-right. 
 
SEMBLER 
 
 
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 2005ROME01785 - Classification: CONFIDENTIAL