Amato left fighting to survive after reshuffle

GIULIANO AMATO'S fragile government, the only one that appears viable in Italy's present political morass, was teetering last night as supporters balked at Sunday's cabinet reshuffle.

Earlier in the day Mr Amato, concerned about the carping and warning that Italy was sliding into confusion and political uncertainty, moved to hold his four- party coalition together by announcing a vote of confidence on the changes. But the tactic, which has enabled him to survive difficult moments before, might not work this time.

Several Christian Democrats declared yesterday that they could not support the Prime Minister's decision to take responsibility for privatising state-owned firms away from the Industry Minister, Giuseppe Guarino - also a Christian Democrat - and give it to a newly created ministry for co-ordinating privatisations.

A leader of the left-wing minority in Mr Amato's Socialist Party, Enrico Manca, declared that the Prime Minister could not necessarily count on their votes. Another Socialist spoke of 'embarrassment' at the reshuffle. The government has a majority of only 16, although smaller opposition parties sometimes vote with it.

A reshuffle under normal circumstances does not necessarily require a vote in parliament, much less a confidence vote. But with the lira yo-yoing nervously in response to every turn in Italy's corruption scandals and political life (yesterday it hit yet another record low against the German mark), the Prime Minister decided to ask his coalition parties to reaffirm their confidence in him.

'We are sliding into a situation of confusion and political uncertainty which is having a bad effect on national life and the financial markets. We must put an end to it,' he warned. 'If parliament can produce another government it should do so and I will be the first to agree.'

Later he complained in a radio interview that 'the government is forced to work in a situation of permanent uncertainty. This does not harm the government but it harms the country, it harms those who are having trouble with jobs, it harms the lira and it harms the community.'

He will address the Chamber of Deputies at the start of the reshuffle debate tonight, and the vote itself is scheduled for tomorrow.

The main source of his problems, Mr Guarino, yesterday called a press conference to announce that, contrary to the impression he gave on Sunday, he neither intended to resign nor take his revenge on the government. The minister, who is widely regarded as having dragged his feet on the government's privatisation programme, had almost wrecked the reshuffle and brought down the government by flatly refusing to give up his portfolio and move to another ministry.

Mr Amato sought to solve the problem by transferring privatisation responsibilities to Paolo Baratta, a well-known figure in banking circles who will now co- ordinate the programme. Old- guard Christian Democrats appear unhappy at losing considerable control of the privatisation process. The state-owned firms have long been a rich source of political patronage, providing jobs, power and - magistrates are now discovering - funds for political parties. Also, their eventual sale will be of great interest to Italian private industry.

Meanwhile, the corruption investigations rolled on with more than 20 politicians and entrepreneurs arrested yesterday in Verona in connection with contracts for work on a motorway and the facilities for the 1990 World Cup matches. In Venice, six more were arrested and another seven notified they were under investigation. One of these was the president of the Veneto regional government, Franco Frigo, who resigned.