Italy's victorious Olive Tree sapped by the hunt for allies

Three days after its historic victory, Italy's centre-left Olive Tree coalition is getting a taste of the obstacles ahead, as it struggles with its own internal contradictions, weighs up the choice of allies it needs for a majority in parliament, and fights off lingering fears of the man it beat, Silvio Berlusconi.

Although euphoria remains high and the authority of the prime minister- to-be, Romano Prodi, remains unquestioned, the various branches of the Olive Tree are already swaying to different rhythms.

The centrist wing, led by the outgoing Prime Minister, Lamberto Dini, has begun wooing the moderate faction of Mr Berlusconi's centre-right, to make up the numbers in parliament. It is already talking of the recomposition of the old Christian Democrats as a buffer force between the ex-communist left and the ex-fascist right.

The main left-wing party, the PDS is busy flirting with the party Mr Dini found hardest to keep on his side during his 15 months in government, the far-left Rifondazione Comunista. "Rifondazione is our ally," said Giovanna Melandri, a PDS member. "We will have to see what we can and what we can't agree on together with it."

Rifondazione is tied to the Olive Tree by an electoral pact that served both of them well. But the two groups have little in common. Mr Prodi wants austerity budgets to bring Italy's public debt into line for European monetary union, which Rifondazione opposed tooth and nail when Mr Dini proposed it.

On Tuesday, Mr Prodi said he hoped to privatise the state telecommunications company, Stet, by the end of the year, as part of a programme to sell off state assets. Yesterday, Rifondazione's leader, Fausto Bertinotti, said he could never accept this. "We have to create a big public sphere for mass communications, just as we did earlier this century with the education system," he said.

Mr Bertinotti, a curious mixture of cloth-cap trade unionist and radical- chic fashion- victim, wants a wealth tax on unearned income and guarantees that state workers' salaries will be index-linked, although this was abolished in the early 1990s because it fuelled inflation.

Such proposals are out of the question if Mr Prodi wants to maintain his moderate image and retain the confidence of the international community. He has said the Olive Tree's programme will stay as it is and it is up to Rifondazione to decide whether it wants to play along.

That means, in practice, that the Olive Tree will have to look elsewhere for support on economic and budgetary issues, either to the volatile Northern League or to disenchanted members of Mr Berlusconi's centre-right.

The Olive Tree's fragility is also affecting the choice of ministers. A struggle is developing over the future role of Luciano Violante, a distinguished anti-Mafia magistrate who would normally be a natural for the justice ministry.

Mr Berlusconi, who has problems with the judiciary, has made it clear he would take the nomination of Mr Violante as a hostile gesture.

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