Berlusconi budget platform cheers the left

ITALY'S election battle is being slugged out over the economy, with the seductive slash-taxes offer of the right-wing media tycoon Silvio Berlusconi under heavy bombardment from the left as 'provincial', 'demagogic' and 'irresponsible'.

Thousands of novice candidates are boning up on subjects such as the deficit, GDP and inflation, while the main contest looks like being in Rome between Mr Berlusconi himself and Luigi Spaventa, the current budget minister and economics professor, who says the tycoon's policies simply have to be fought.

The battle finds the left in the entirely new role of guardians of budget discipline and fiscal rectitude.

And the Italian business world is developing schizophrenia. A poll by L'Espresso news magazine of 60 members of the 157-strong committee of Confindustria, the industrialists' confederation, found that 40.3 per cent planned to vote for the right-wing Berlusconi/Northern League/neo-fascist alliance, but only 9.4 per cent wanted to see Mr Berlusconi, its leading candidate, as prime minister.

Only 12.3 proposed to vote for the left, but 58.5 per cent of them would like Carlo Azeglio Ciampi, the Prime Minister and supposedly the left's candidate, to carry on in his job. The centre is regarded as weak and only attracts 22.8 per cent, while the industrialists' rating of its likely candidate, the electoral reformer Mario Segni, has plunged from 25.7 per cent in December to 7.6 per cent.

The poll is misleading because, while the left is happily allowing the media to portray Mr Ciampi as their man, they have not asked him to be their candidate - and he has declined publicly. The former governor of the Bank of Italy, his staff say, sees himself as a 'man for emergencies' but not a political leader.

Mr Ciampi's own leanings are closer to the left and another transitional scenario involving him and them is not unthinkable. At the same time, he makes no secret of his distaste for Mr Berlusconi's ideas, which he regards as dangerously inflationary and anti-European.

A big problem for the Party of the Democratic Left (PDS), which dominates the left-wing alliance, is throwing off the stigma of its Communist past. The party has moved well into the centre and could be described as moderate Social Democratic. Achille Occhetto, its leader, recently met leading figures in the City and in Brussels and was reportedly able to reassure them about his intentions. Representatives of the Northern League and Mr Berlus coni's Forza Italia are also planning to visit London soon - the city's perceived blessing seems to be a sought-after credential.

The PDS economic programme states bluntly 'there is no alternative to the market economy' and 'we cannot redistribute what we do not produce'. It promised to continue the Ciampi government's programme of cutting the state deficit 'with the same rigour and severity'. Taxes can be reduced only when the state of public finances makes it possible. It is strongly in favour of privatisation.

The PDS was not pleased when Fausto Bertinotti, leader of Rifon dazione Comunista, the hardline splinter group which is a member of the left-wing alliance, called for taxation of interest on state bonds - which is electorally about as popular as promising to abolish tax relief on mortgages in Britain. He said Italy should pull out of Nato too. His horrified allies accused him of trying to lose them the elections and Mr Occhetto flatly rejected both ideas.

The PDS line may reassure the business world but will it win votes? Many Italians could well prefer Mr Berlusconi's proposal to slash VAT and impose a single income tax rate of no more than 30 per cent. When experts pointed out that the net result would be substantially higher taxes for lower-

income groups and much lower ones for the rich, his economic adviser said poorer people would be exempted.

It is the first time in decades that Italian voters have needed to read the programmes of the various parties. But given the differences within the three main electoral alliances, they may wonder if what they see is what they will get.