Leading Article: Curtain rises on an Italian farce

SILVIO Berlusconi took office as Prime Minister of Italy barely three months ago on a promise of change. He is a media magnate who achieved political power through a brilliant marketing campaign and the ruthless use of his private television stations. Predictably, his government is already in a mess.

It did not take very long for Mr Berlusconi's image to crack. First, the Prime Minister turned on his rivals at Italian state television and its board of governors resigned. He now controls the three state channels as well as his own broadcasting empire. He professes himself committed to resolving this obvious conflict of interests yet, curiously, nothing has been done.

Next Mr Berlusconi decided to assert his power over senior appointments at the Bank of Italy. That is a threat to its traditional integrity. He appointed as Treasury Minister Lamberto Dini, a gentleman whose long-standing connections to the old political establishment do not presage zealous reform. It may be doubted whether the necessary austere budget can be agreed and passed through parliament by the coalition.

It was Mr Berlusconi's transparent moves against Italy's judiciary, however, that showed him in his true colours. He passed a decree removing the power of pre-trial detention from magistrates investigating corruption. This had beneficial effects for many of Mr Berlusconi's old friends. But it proved too much for public opinion. The coalition partners revolted. The decree was rescinded.

Now Mr Berlusconi's own brother has been served with an arrest warrant by magistrates inquiring into allegations that corrupt payments were made to secure lenient tax treatment for the Berlusconi holding company, Fininvest. Yesterday, Mr Berlusconi's old patron, the former Socialist Prime Minister Bettino Craxi, was told that his passport would be confiscated should he ever return from his prolonged sojourn in Tunisia to face trial on corruption charges.

The bond and equity markets, which so hastily celebrated the victory of Mr Berlusconi in the deluded belief that he stood for free markets and reform, are marking prices sharply down. The lira is falling. The Prime Minister's underlings like to blame that familiar scapegoat, the foreign press. But Confindustria, the Italian CBI, yesterday spoke of its serious concern for political stability and the economy. Before farce turns to tragedy, the Northern League and the neo- fascists, who have thus far behaved with responsibility, may be forced to consider their positions. The alternative for Italy is another general election.