The Not-So Dolce Vita

The exquisite 16th century Villa Madama, overlooking Rome from atop the bluff of Monte Mario, is normally an Italian government guest house for visiting heads of state. Originally, the formal gardens, fountains and frescoed ceilings of the villa, designed by Raphael for Pope Clement VII, provided the setting in which the Medici Pope wheedled, wheeled and dealed. Last week, that atmosphere temporarily returned. Caught in a political crisis and under orders from President Giovanni Leone to resolve it rather than resign, representatives of the parties in Premier Mariano Rumor's ruling center-left coalition gathered in the Villa Madama's splendid isolation for a two-day summit. Medicis and Borgias would have enjoyed the infighting and cross-dealing.

Compared with government crises in the past, the 19 summit participants labored with uncommon zeal. Outside, chauffeurs of the 19 Alfa 2000s and Fiat 130s lined up along the villa's graveled drive, huddled over radios listening to the Italy-Argentina World Cup football match. Inside, like so many American officials unhappily missing a World Series, the political leaders gathered round a brocade-covered table in the Giulio Romano Room, so named for the artist who painted its frescoes. They did not even break for dinner--an uncommon sacrifice for Italian politicians--but had it boxed in by Rosati's, a popular Rome cafe.

Involved in the talks were the four parties that have participated in Rumor's most recent coalitions: the Christian Democrats, whose internal factions range from right to left; the Socialists from the left; the centrist Social Democrats; and the small, slightly leftist Republicans, who dropped out of the Coalition last March as a protest over its fiscal irresponsibility.

Their discussions centered on Italy's heavy spending, reckless living and dependence on higher-priced Arab oil (TIME, June 24). The nation's 17% annual inflation rate and $10.5 billion foreign debt are so serious that only the use of Italy's gold reserves as loan collateral has shored up the country's credit rating. The situation called for emergency action, but at the outset last week the Christian Democrats and Socialists, the dominant partners, still could not resolve the impasse that had brought the coalition to the edge of collapse. They differed bitterly on the single issue of a national credit squeeze. Christian Democrats wanted to keep credit tight to stem inflation. The Socialists demanded that it be eased to avoid unemployment and help small businessmen.

The group gradually reached agreement, mostly on Socialist terms. Over the next nine months, credit should expand by $35 billion, with small and medium businesses that are engaged in export given preference. Meanwhile, almost $5 billion in new taxes and charges is likely to be levied, including higher transportation and utility rates, stiffer taxes on fancy foods and other consumer goods, an auto-license surtax and a possible 100% increase in the $20 national tax on television sets.

Socialist Gains. Finding political accommodation that would lead to reforming the coalition was more difficult because of recently shifting power balances. Scarcely hours before the Villa Madama summit, results were announced from regional elections on the island of Sardinia, 125 miles out in the KEYSTONE Mediterranean. Socialists and Communists had been expected to win handsomely and they did, thus continuing a national voting trend to the left that became obvious last month in a referendum over retaining Italy's divorce law. On Sardinia the two leftist parties drew abreast of the Christian Democrats for the first time since World War II, with each side winning about 38% of the island vote for local offices. Although Sardinia was not mentioned by name around the brocaded table, the returns encouraged Socialist Party Secretary Francesco de Martino to demand "a different relationship with the constitutional opposition, and the Communist Party in particular."

What De Martino in effect wanted was a policymaking vote for the Communists even if their party is not a formal partner in the government.

The party now represents 27% of the national electorate but has never been a member of any coalition. "The Socialists want their wife in the government and their little girl friend in the opposition," sniffed Social Democrat Leader Flavio Orlandi. "If they insist on our blessing, we're not going to give it." The Socialists finally relented on that demand, and Premier Rumor ultimately obtained agreement on a vague statement promising increased unofficial consultation with the Communists.

Despite the agreement, and probable parliamentary approval of it this week, Italy's troubles were far from over. For one thing, Christian Democratic factions, which have been stung by the Sardinian elections, are engaged in unsettling feuds among themselves. If the bickering goes too far, it could bring down Rumor's coalition. Beyond that, Rumor and his reconstituted government still have to face popular reaction to an unpopular list of stiff new taxes.

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