Prodi steps down, with rancour

Unable to hold its parliamentary majority together and get the country's finances into shape for European monetary union, Italy's precarious centre-left government finally collapsed yesterday, leaving an unholy political mess.

Andrew Gumbel says it may yet jeopardise the country's chances of joining the single currency.

After more than a week of fruitless negotiations and last-minute deal-brokering, Italy's Prime Minister, Romano Prodi, finally gave up the struggle just after 3.30 yesterday afternoon. Despite concessions on health, on employment, on shorter working hours, and on pensions, there was nothing he could do to stop the small far-left party Rifondazione Comunista from opposing his budget package for next year and plunging the country into crisis.

He had tried once on Tuesday, with an impassioned speech to the Chamber of Deputies where Rifondazione holds the balance of power. And his team tried again all Wednesday night, looking for common ground where in reality no common ground existed because of the intransigent Rifondazione leadership.

"We have no choice but to vote against this budget," ran the conclusion of a withering speech by Rifondazione's Oliviero Diliberto. "You were the ones who did not want to compromise, you were ones who didn't want to reach an agreement, it is you who have acted superficially and arrogantly."

On hearing this twisted version of events, Mr Prodi wasted no time in announcing he was on his way to the presidential palace to resign. The luminaries on the government benches sat ashen-faced, scarcely believing that the left's first experience of power in Italy since the Second World War should end in this petty, rancorous manner. As the parliamentary session broke up, there were emotional embraces and some open weeping.

Rifondazione has proved a fatal weakness for the government ever since Mr Prodi and his team took office 17 months ago. But this was perhaps the worst possible timing for a political crisis, since Italy was on the verge of winning the battle to be admitted to the European mainstream and join the single currency in the first wave.

Everything is now thrown open to question. President Oscar Luigi Scalfaro is likely to reject Mr Prodi's resignation, or else try to form a new provisional government that can push the budget.

The main party of the outgoing government, the PDS, wants to hold elections immediately. The powerful foreign minister and centrist leader Lamberto Dini, meanwhile, is in favour of forging a new majority that would not be dependent on Rifondazione and would take in elements of the Christian Democrat centre-right.

The longer the crisis goes on, the more distant the dream of Europe is likely to become. "Prodi ... is destined to end like Moses, who died before he could reach the promised land," observed the right-wing deputy Giulio Maceratini.