Italy heads for hustings as reform bid founders

ANDREW GUMBEL

Rome

President Oscar Luigi Scalfaro reluctantly admitted defeat yesterday in his efforts to find a way out of Italy's chronic political instability. He dissolved parliament and will call a general election, which must take place by the beginning of May.

The President signed a decree formalising his decision after consultations yesterday afternoon with the speakers of the two houses of parliament.

The two most favoured election dates appeared to be 21 or 28 April.

His decision came two days after the latest attempt to build a non-political government dedicated to durable reform of the system collapsed, and the prime minister-designate, the political fixer Antonio Maccanico, handed back the mandate he received at the beginning of the month.

Italy is thus heading towards the one outcome everyone wanted to avert - elections without electoral reform, which risk creating a parliament every bit as divided as the present one. Two opinion polls published in the aftermath of Mr Maccanico's withdrawal confirmed the political class's worst fears - that the two volatile alliances representing left and right each enjoy almost half the vote.

Italy had hoped to make a fresh start politically after the collapse of the old Christian Democrat-led Cold War order three years ago, but has instead dug itself into a hole deeper than any since the dark pre- Fascist days following the First World War. Attempts to reduce the number of parties in parliament and create a working government majority have backfired spectacularly - the outgoing Chamber of Deputies contains 26 parties, compared to the 11 that won seats in 1992. The election campaign promises to be a Byzantine game of alliance-forming and jostling for power.

The debate on constitutional reform, which has consumed party leaders for the past six weeks, has therefore been merely postponed, losing Italy yet more time in its struggle to modernise.

The international investors on whom Italy depends to service its massive public debt are concerned that the general election will divert attention from the urgent task of bringing the budget deficit to heel. They had been hoping for a mini-budget to correct the shortcomings of the 1996 provisions, but this almost certainly will not now come before the autumn.

The election campaign will coincide with Italy's big moment on the international stage, as the host of the European Union's summit in Turin at the end of March inaugurating the Inter-Governmental Conference on political and economic union.

For the next two months, the outgoing Prime Minister, Lamberto Dini, is expected to continue in a caretaker capacity. The price of Mr Dini's temporary resuscitation is likely to be an undertaking that he will not stand in the elections.