Leading Article: The bright side of Italy's crisis

THERE are two ways of responding to the Italian crisis, which will pass through a critical moment today when the embattled Prime Minister, Giuliano Amato, faces a vote of confidence in parliament. One is to lament the chaos induced by the collapse of the old system. The other is to cheer the fragile buds of reform as they push through the rubble. Both views are valid, but unfashionable optimism has a fair chance of being vindicated.

Of course, the chaos is real enough, and damaging while it lasts. The political system has virtually collapsed under the impact of corruption charges that have swept through parliament, local government and the upper reaches of the main parties. The economy is in deep trouble, burdened by uncompetitive state industries and a huge budget deficit that puts it beyond resuscitation by the small firms that once provided its life-blood. The lira is lower than ever. The country is suffering, and so is the European Community, which can ill afford a black hole where one of its larger members ought to be making a political contribution.

Yet the news is not all bad. Italy's system of government had outlived its usefulness. The dominance of the Christian Democrats seemed unavoidable throughout the Cold War because they provided the only alternative to the largest Communist party in Western Europe. Corrupt though the party was, it did not stifle economic growth, largely because Italians learnt to work their way through and round the system, exploiting its loopholes and conniving in its peculiar practices. The collapse of Communism has ended the need to put up with all this, while the onset of a colder economic climate has made it essential to reform the economy. Italy can no longer afford the luxury of a large state sector run by political appointees, a creaky bureaucracy, a pervasive system of political patronage, an over-confident Mafia, widespread tax evasion and an electoral system that produces weak and wobbly coalitions.

The country is, however, lucky enough to have a population that is now demanding change and a prime minister who is doing his best to respond. Mr Amato is struggling to privatise state industries, reduce corruption and tax evasion, reform the welfare state and encourage constitutional change. Naturally, he is running into heavy opposition. His latest crisis is the result of his efforts to sack a Christian Democratic minister, Giuseppe Guarino, who has been blocking privatisation (state industries have long provided the party with a rich source of patronage and funds).

Mr Amato's best ally is the evidence that an election held under the present system would produce a massive vote of no confidence in the larger parties with corresponding support for all the regional and extremist groups that have been harvesting the protest vote. The result would be still greater fragmentation and chaos. He may therefore scrape by today. He certainly deserves to do so, for no one else on the scene looks better qualified to push through the necessary reforms and set the scene for elections under a new system. If he is defeated, the next incumbent will have a still more difficult task. In the meantime Italy's resilience under stress, its struggle to shake off the past, its mobilisation of popular support for change, deserve as much attention as the failures of the system that is now dying.