Verona, Italy.

After shying away from an opera rendezvous, Italian Prime Minister Silvio Berlusconi met German Chancellor Gerhard Schroeder yesterday for the first time since his Nazi jibe caused a diplomatic furore.

Italy's billionaire businessman-turned-politician provoked an uproar at the start of July when he likened a German lawmaker to a Nazi concentration camp guard, casting a shadow over Italy's six-month presidency of the European Union.

But yesterday he stood shoulder-to-shoulder with Schroeder in the medieval Italian city of Verona and both played down the summer spat, and Berlusconi's no-show at the opera on Friday.

"I don't think we can talk about an improvement (in relations) because there was never a worsening," Berlusconi told reporters after their brief meeting.

Schroeder also said the case was closed.

"There's no doubt that there have been minor irritations here and there but this has not affected our personal relationship, nor has it affected the political relationship between Germany and Italy," he said.

Berlusconi said his absence at Friday's performance of Carmen in Verona's ancient Roman amphitheatre had prevented a disruption by whistle-blowing left-wing protesters. He had said earlier this week he expected demonstrations at the opera.

"If I'd have turned up, I would have created an inconvenience for the chancellor and (European Commission President Romano) Prodi so I sacrificed myself," he said yesterday, adding he was upset his music-loving wife had not been able to make a rare public appearance.

Bitter opposition to Berlusconi from Italy's left-wing parties deepened recently after his alliance approved a law giving the prime minister immunity from prosecution. Berlusconi, Italy's wealthiest businessman, had been on trial for bribery.

Leading newspaper Corriere della Sera said Berlusconi might have been worried that Prodi - a potential left-wing challenger to Berlusconi in future elections - would upstage him. But it said his decision was a "stunning" mistake for a media mogul who made his fortune through savvy presentational skills.

German papers joined the chorus.

"Opera summit in Verona - only one couldn't hold his tune," was the Berliner Kurier's headline.

Several others suggested he might have not shown up to get revenge on Schroeder for cancelling his summer holiday to Italy.

Schroeder spent his vacation on home soil after a junior minister in Berlusconi's government described Germans as "hyper-nationalistic blondes" who invaded Italy's beaches, just days after Berlusconi's Nazi comment.

Schroeder and Berlusconi said yesterday they had discussed progress towards the EU's first constitution which Italy hopes to have largely finished by the end of the year.

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