Defiant Berlusconi denies apologising for Nazi insult

Silvio Berlusconi, the Italian Prime Minister, denied yesterday that he had apologised for comments likening a German MEP to a Nazi concentration camp collaborator.

On Thursday he was reported to have climbed down during a telephone conversation with Gerhard Schröder, the German Chancellor. But yesterday he said of the call: "I did not apologise. I underlined forcefully that I was offended, I and my country."

Speaking at a joint press conference in Rome with Romano Prodi, the president of the European Commission, Mr Berlusconi twice repeated his explanation for his insult to Martin Schulz on Wednesday ­ that it was an ironic joke. "I added," he said of his phone conversation with Mr Schröder, "that if anybody interpreted what was meant ... as damage to the deep feelings of a country, I was very sorry. But I have not apologised."

But German officials said that Mr Berlusconi had apologised. In Brussels yesterday, Joschka Fischer, the German Foreign Minister, said: "For us the matter is closed with the apology. What we want is a successful Italian presidency in the interests of Europe."

Mr Berlusconi's gaffe on Wednesday at the opening session of the European Parliament in Strasbourg sunk hopes of a smooth start to Italy's European Union presidency.

He told Mr Schulz, a German Social Democrat, that he would be perfect to play the part of a concentration camp "kapo" ­ a collaborating prisoner employed to keep other inmates in line ­ in a film. The bizarre comment provoked boos in the chamber. When Mr Berlusconi refused to withdraw it, the president of the Parliament, Pat Cox, adjourned the session.

The scandal has knocked the beginning of Italy's presidency sideways: some commentators in Italy said it was sunk before it had started.

One paper suggested that Mr Berlusconi should hand over to his Deputy Prime Minister, Gianfranco Fini, who shows a steadier hand. Yesterday, Mr Berlusconi and Mr Prodi took the podium together at Rome's Foreign Ministry.

The European Commission was in Rome for talks with Italian officials on launching Italy's programme for the presidency, but neither man attempted much in the way of fraternisation. Mr Prodi looked as if he had swallowed a bad oyster during his dinner last night. Mr Berlusconi was his usual slick and cocky self.

Although Mr Berlusconi and Mr Prodi said all the right things about working together for Europe over the next six months, storm clouds have been gathering.

Mr Berlusconi shows signs of using the EU presidency to push his own agenda in three vital areas of policy.

He is pressing the EU to lift its arms embargo on Libya. He is keen to supply Colonel Muammar Gaddafi with night-vision technology and gunboats which the Libyan dictator claims he needs to patrol his coast to stop the immigrants from departing. Mr Berlusconi's move reflects the obsession of his xenophobic coalition partner, Umberto Bossi. Last month, Mr Bossi said the Italian navy should turn its guns on boats bearing illegal immigrants.

Mr Berlusconi is also lobbying to have his ambassador to Syria, Laura Mirachian, replace the EU's outgoing Middle East envoy, Miguel Moratinos.

But although helping to push the Middle East road-map forward is one of Italy's tasks for the presidency, there are doubts whether Palestinians will accept Mr Berlusconi as an honest broker after Ariel Sharon, the Israeli Prime Minister, described Italy as "Israel's best friend in Europe". Mr Berlusconi has also said that he wants to see Israel inside the EU.

Diplomats fear that Mr Berlusconi might damage hopes of finding a solution to the Kosovo stalemate. Javier Solana, the EU's foreign policy chief, hopes to start talks soon between Serbs and ethnic Albanians on the final status of Kosovo. Mr Prodi's choice for an EU envoy, Stefano Sannino, has served twice in Belgrade.

But Mr Berlusconi is pushing for Antonio Armellini, currently his envoy in Baghdad, to take the post. Mr Armellini lacks Balkan experience, and European diplomats fear this will hobble his chances of bringing the two sides together.