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Technocrat faces rough ride in Italy

As Italian government crises go, it was unusually short but also unusually vicious. Just 22 days elapsed between the collapse of Silvio Berlusconi's coalition and the appointment yesterday of Lamberto Dini, the austere outgoing Treasury Minister, as Prime Minister.

Back in the bad old days of the 1970s and 1980s, government crises went on for six weeks or more. In 1979, the country ground to a halt for a full five months before the squabbling of the parties was resolved.

Yet the past three weeks have done untold damage to the standing of Italy's political class, both at home, where voters in last March's elections had hoped for something better than the mud-slinging of the past year, and abroad, where investors and currency speculators have been panicking. Rarely have Italian politicians insulted one another with such vigour while playing for such high stakes - this was, after all, supposed to be a new era after the corruption and stagnation of the past. This week, the system looked in danger of collapse.

Then, all of a sudden, the breakthrough. Mr Dini's appointment was welcomed by all the main parties. Mr Berlusconi's demands for immediate elections if he could not be reinstated vanished in the wind. Above all, the financial markets rallied, bringing Italy back from the brink of economic disaster. For the business community, President Oscar Luigi Scalfaro could not have made a better choice than Mr Dini.

Here was a man with a solid international reputation as a first-rate banker and super-cautious guardian of the public purse; a man with an untarnished record of personal honesty and, perhaps most important, a banker rather than a politician, with no taste for party back-stabbing.

But Mr Dini and his team of technocrats - which he has yet to name - know that the real battle starts here. However harmonious politicians might sound now, they are likely to fight tooth and nail over every one of Mr Dini's essential reforms.

Mr Berlusconi, in particular, is unlikely to give up his campaign for elections as soon as possible, seeing them as his best chance of regaining power.

"Berlusconi won't give up but will struggle to the end. He knows that if he is forced out of politics it could be the beginning of the end for him and his indebted business empire," said Ettore Gallo, former president of the Constitutional Court.

Two policy areas outlined by Mr Dini yesterday - new controls on media ownership and electoral reform - are directly against Mr Berlusconi's interests. The former could force him to give up part of his television network; the latter could reduce the impact he enjoyed under last March's single-round, mostly non-proportional system.

Mr Berlusconi's adversaries know they have a good chance of getting rid of him once and for all. "We are going to kick out the great corrupter," said a typically florid Umberto Bossi, leader of the maverick Northern League, whose defection from the government toppled Mr Berlusconi last month.

But Mr Dini's government will be far from an anti-Berlusconi coalition. His plans to cut public spending, and state pensions in particular, to help to balance the budget are likely to cause soul-searching on the left. The small left-wing Rifondazione Comunista party, whose votes might prove critical if Mr Berlusconi and Gianfranco Fini's neo-Fascist National Alliance choose to stonewall, has expressed serious doubts.

The one subject on which Mr Dini remained silent yesterday was how long he hoped to remain in power. Eighteen months or two years might be ideal for his programme. But with parliament in civil war between pro- and anti-Berlusconi camps, he may not last that long.