'No' vote would block Italian reforms: Ratification of the Maastricht treaty is vital for the country's future because, without it, urgent economic measures will fail, writes Patricia Clough in Rome

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The Independent Online
THE possibility of a French 'No' to the Maastricht treaty on 20 September fills Italian leaders with horror. 'It would be terrible,' said Eugenio Scalfari, editor of La Repubblica. 'Worse than a disaster,' said Giovanni Spadolini, the president of the Senate. A 'No' vote 'would block the process of reforms in Italy. It would block everything - economic reform and institutional reform,' he explained.

For the government, 'Maastricht' is an indispensable gun to hold at the heads of political parties and force them to put Italy's economic house in order - and particularly to take the painful measures needed to cut its massive state deficit and fall in line with the treaty's requirements.

The alternative - failing to make 'Europe' - is too awful for anyone here to countenance, and Italian officials in Brussels have been quietly urging the Commission to lay it on thick about the gravity of their country's situation in order to soften up public opinion back home.

The measures are vital for Italy's economic future whether the French vote 'Yes' or 'No'. But everyone assumes that without the Maastricht gun at their heads, the politicians will hardly find the strength to push through the government's plans, for instance, to cut back Italy's generous pensions and health spending and prune the overgrown civil service in the teeth of their supporters' protests.

The Italian Senate is likely to ratify the Maastricht treaty before the French referendum partly as a gesture to encourage a 'Yes'. This had been expressly urged by Emilio Colombo, the Foreign Minister, to demonstrate that Italy is really committed and that its Europeanism is 'not merely a facade'.

He also demanded that this be made even more convincing by an urgent package of bills to tackle the public debt problem, but he is not likely to get this so fast.

The haste to ratify prompted the ex-Communists' Senate floor leader, Giuseppe Chiarante, to complain: 'It is unjustifiable that while other countries debate Maastricht thoroughly and some have called, or already held, referendums, in Italy the government is demanding that the Senate ratifies it in a few days without seriously evaluating the implications.' For doubts about the Maastricht treaty have begun to stir even here. Until a couple of weeks ago, to criticise it was unthinkable - 'a bit like criticising Garibaldi', as the Corriere della Sera remarked.

But that was before last week's monetary tempest which brought Italy, in the words of the Prime Minister, Giuliano Amato, 'to the brink of the abyss' and forced the government to raise the interest rate by 1.75 percentage points to a crippling 15 per cent to avoid devaluation.

The main critics of Maastricht are in the opposition - particularly former Communists, fascists and radicals. But doubts are also being raised by members of the government parties, economists and others whose pro-European credentials are undisputed. One is the top industrialist Carlo De Benedetti, who maintains that Europe is too much under the domination of the German mark and the high German interest rates and that either the mark should be revalued or it should temporarily leave the European Monetary System.

An economist, Paolo Leon, said: 'We are seeing how the autonomy of the Bundesbank creates international imbalances at a gigantic cost. If the future (European) Central Bank behaves like this, there will be trouble.'

Another economist, Augusto Graziani, pointed out that Italy's increased interest rates were helping compound its already massive public sector deficit and were a severe blow to industry. 'To me, Maastricht seems a danger at a time when the lira is over-valued and the authorities are determined to defend it.'

Some politicians are alarmed by an International Monetary Fund prediction that Maastricht will slow down economic growth, while one Italian trade union has forecast that it will result in the loss of more than half a million jobs.

But the storms that nearly torpedoed the lira and dealt blow after blow to the Milan stock exchange appear to have had the salutory effect of bringing home to many ordinary Italians the fact that their economy really is in trouble: their industry is no longer competitive, their public spending too high and their currency

over-valued.

And it has given commentators an opportunity to point out that, for all the doubts about the wisdom of Maastricht, Italy's economic plight is home-made and, if the country is to recover, hard sacrifices lie ahead. 'People's eyes,' remarked one government official, 'have been opened.'

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