Prodi fights for Italy's credibility

Will Romano Prodi go down in history as the prime minister who catapulted Italy into European monetary union in record time, or the man who messed it all up?

With his governing coalition growing restive, parliament sharpening its knives to debate his tax-ridden budget proposals, and Jacques Chirac arriving for a highly uncomfortable bilateral summit, the Italian premier was battling yesterday not only to preserve his country's credibility, but also his own.

Mr Prodi has been at the eye of a pan-European storm ever since he decided last week to ditch Italy's carefully laid public finance plans in favour of an austerity budget that he promised would be enough to qualify Italy for the single European currency from the word go.

First, Mr Prodi himself admitted that it would take as much luck as judgement for the budget to bring the country's public finances even remotely into line with the Maastricht criteria. Then Mr Chirac rubbed salt into the wounds by stating flatly that Italy would not be in the initial line-up - a remark which sparked such a diplomatic storm that he was later forced to retract it, but one which will surely heighten the tension in Naples this morning when he meets Mr Prodi to discuss the next stage of European integration.

In the past few days, some of Mr Prodi's own political supporters have been belittling his initiative as "clumsy", "amateur", and "haphazard". The right wing of his Olive Tree coalition has balked at his high tax proposals and at his refusal, prompted by the far-left on whose votes he depends in parliament, to cut into pensions and health care charges.

Meanwhile Massimo D'Alema, the leader of the left-wing PDS and Mr Prodi's most important political sponsor, has publicly criticised the budget's high housing-tax provisions, and urged them to be revised.