Moving to a Shootout

In the smoke-filled salon of a 17th century Roman palazzo, Italy's Christian Democrats last week battled for the future of their strife-torn, dispirited party. After five hours of tense debate, party leaders finally emerged with a plan of action, a marked change after the vacillation and near paralysis that have gripped the governo diparcheggio, or "parking-meter government," slapped together two months ago under Premier Aldo Moro. They would make one last--and probably foredoomed--try to cooperate with the other parties on emergency economic measures. If that failed, they would have to accept the inevitability of an early election--probably this June, a year ahead of schedule. It would be an election they may well lose, but the Communists are leery of winning. Given what observers call a choice of "a gun or slow poison" (a quick, risky election or the certainty of ever-increasing Communist influence), the Christian Democrats seemed inclined to try shooting it out.

Deepening Relationship. The party's right wing, which prefers confrontation rather than compromise with the Communists, largely prevailed. Former Premier Amintore Fanfani, 68, was elected president of the party's national council, an honorary post that would give him a handy platform for the campaign. A tough scrapper, the self-styled "Tuscan Pony" likes nothing better than a tussle with the Communists, whose party organ L'Unita huffily described his resurrection as "partly pathetic and partly provocative." While Fanfani makes his pitch to voters on the right, beleaguered Premier Moro, 59, and Party Secretary Benigno Zaccagnini, 64, will try to keep the Christian Democrats' left-wing supporters in line.

The Socialists have been itching for early elections because they fear the deepening de facto relationship between the Christian Democrats and the Communists will leave them out in the cold. Accordingly, they rejected with gusto the Christian Democrats' proffered olive branch, dismissing the offer of further consultation. Socialist Party Secretary Francesco de Martino declared, "With these Christian Democrats, it's finished. The last possibilities have been burned up." Deputy Loris Fortuna exulted, "Basta! We've cut the last rope. We're not going to let ourselves get dragged into any more rounds of yes-but-maybes or other tiresome stalling maneuvers." The Socialists are confident their stands in favor of divorce and legal abortion--two issues that have fractured the Christian Democrats and cost them votes because of their opposition--will win them more seats in Parliament.

The Communists, on the other hand, are more cautious. Though they stand a good chance of making further advances--they finished only 2% behind the Christian Democrats in last June's contest--they are wary of victory. It is not an ideal time to come to power, with unemployment, inflation and violence grimly mounting. The Communists would prefer to further their informal accommodation with the Christian Democrats, enhance their national and international respectability and ease quietly into power at a more opportune moment (see box following page). Asked by a colleague if he wanted to achieve the "historic compromise" in the next few months, Communist Party Leader Enrico Berlinguer replied, "You don't think we're crazy, do you? We're not about to expose ourselves to an argument with the American people in the midst of a presidential campaign. The reaction might be pathological."

What's to Come? With no government firmly in control, conditions in Italy continued to deteriorate. Inflation was running at an annual rate of 20% and unemployment at 7%. Last week the lira plummeted briefly to an alltime low of 898 to the dollar. "There is a whiff of Weimar in the air," said a Christian Democratic Deputy. The Milan stock exchange plunged to a 20-year low, and Rome's pro-Socialist daily La Repubblica ran the headline: THE SHADOW OF BERLINGUER OVER THE STOCK MARKET.

Confidence in government was further eroded last week when the British press disclosed that England's two largest oil companies--Royal Dutch/Shell and largely government-owned British Petroleum--had paid some $2.5 million in contributions to the Christian Democratic coalition between 1967 and 1972. The details were largely leaked to the Italian press three years ago, and the case was sent to Parliament, where it languishes out of apathy.

The Italian picture is not entirely bleak. An improved economic growth rate is forecast for 1976, and last year the balance of payments deficit was considerably reduced from $6.5 billion to $1.5 billion. More tourists than ever may visit Italy because the weakening lira will give them more for their money.

The situation in Italy has been made worse by fears of what is to come. Trying to persuade his countrymen not to "lose control of their nerves," Fiat Chairman Gianni Agnelli, Italy's most powerful industrialist, said last week: "I find absurd the panic of certain people who believe that perhaps the Communists, in the event they were to assume power, would transform Italy into a dictatorship from one day to the next. The real problem is not what the Communists will do but what the rest of us will do. We industrialists are not running away. We invite everyone to do the same." In fact, many businessmen are fleeing to safer havens like Canada, where in 1975 20% more visas were granted to Italians than the year before. Well ahead of this spring's probable elections, Italians are voting with their feet against the massive breakdown in government.

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