Italian electorate's choice

ITALIANS vote today and tomorrow in a general election which has been characterised by a bitter rivalry between the two candidates for the Prime Minister's job - Silvio Berlusconi, the incumbent, who heads the centre-right House of Freedoms bloc, and Romano Prodi, leader of the centre-left coalition, the Union.

Although the electoral campaign got off to a slow start, it ended in a barrage of insults between the two candidates who seem to have little respect for each other. The opinion polls continue to show Professor Prodi's coalition ahead of the centre-right bloc but a large chunk of the electorate remained undecided up till the very end, and they could very much determine the outcome of this election.

Most observers agree that Monday's second debate between the two leaders ended in a draw, with no clear winner. It has to be pointed out, however, that the Prime Minister performed far better than he did during the first debate. Mr Berlusconi was calmer and more confident than before and he concentrated more on what he would do over the next five years.

Unfortunately the debate was characterised by insults from both sides. Professor Prodi said at one point: "The Prime Minister clings to data in the way a drunkard clings to lamp-posts - not for illumination, but to keep him standing up." To which Mr Berlusconi replied: "Prodi is like a useful idiot - he lends his jolly parish priest face to the Left, which is 70 per cent made up of former Communists".

Mr Berlusconi surprised everyone at the end of the debate by offering to abolish a property tax for first-time home buyers, something which was not listed in his electoral manifesto. This could have a positive effect on many young voters, which opinion polls show are largely undecided over whom to vote for. However, after the television duel, his centre-left opponents ridiculed Berlusconi's latest proposal which would mean denying local governments revenue of up to €2.3 billion a year, which is used to finance public services.

During the debate Mr Berlusconi again attacked his opponent for being an old-fashioned raiser of taxes who is a prisoner of the Left, and especially criticised Professor Prodi's proposal to introduce an inheritance tax. The Union leader has also been under pressure to explain how he would implement his promise of cutting labour costs by five per cent in his first year in office. Although he claims this would be covered by capping public expenditure, cracking down on tax evasion and raising capital gains taxes, some observers make the point that - at least for the first two proposals - in Italy it is far easier to announce spending cuts and a crackdown on tax evasion than to actually implement them.

So, what are the concrete differences between the two sides? Mr Berlusconi's main proposals include a pledge to cut labour taxes by three per cent over three years, lower taxes for companies on reinvested profits, a crackdown on tax evasion, the already referred-to abolition of property tax for first-time home buyers, the creation of 1.5 million jobs over a five-year period, an increase in the minimum pension from €550 to €880 a month, free TV licences and public transport for the elderly, a development bank for Italy's South, the construction of a bridge between Sicily and the mainland, increased privatisations, 10,000 more police on the streets, the sale of public housing to their tenants, free school textbooks and the separation of careers between judges and prosecutors.

Professor Prodi's platform includes higher capital gains taxes on some bonds and equities, the reintroduction of inheritance tax "for the wealthy", a crackdown on tax evasion, the cutting of labour costs by five per cent, new rules to cut public sector wages, reduced incentives to hire short-term staff, a watering down of the pension reform that increased the retirement age from 57 to 60, financial incentives for investment in the South, the freezing of plans to build a bridge between Sicily and the mainland, the liberalisation of some public services, the strengthening of the law regarding politicians' conflict of interest, a reform of criminal law, loan programmes for the purchase of first homes and tax credits of €2,500 a year for children under three.

On the face of I, the centre-right's proposals would seem to be more attractive and business-friendly but of course anyone making a choice today and tomorrow would have to take other facts and issues into consideration. There are pluses and minuses to both sides.

Mr Berlusconi's five-year-old government has given Italy stability - there can be no doubt about that - and certain economic reforms have been carried out. The national unemployment rate has been reduced to 7.7 per cent from 9.1 per cent in 2001 and in the South the jobless rate was reduced from 21 per cent in 2001 to 14 per cent today - still high but at least an improvement was registered.

On the other hand, Italy's economic performance over the past five years has not been spectacular - economic growth has been virtually zero, while the deficit and national debt figures are still relatively high. Furthermore, there is the question of Mr Berlusconi's massive conflict of interest vis-à-vis his media empire and the many criminal investigations that were conducted into his past dealings.

Mr Berlusconi's many outbursts have created many enemies and given Italy a bad image. In 2003, for example, he responded to heckling in the European Parliament by comparing Martin Schultz, the German leader of the Socialist MEPs, to a Nazi concentration camp guard. Last Tuesday he insulted left-wing voters at a conference of retailers by stating: "I trust the intelligence of the Italian people too much to think that there are so many coglioni (slang for testicles) around who would vote against their own best interests".

The centre-left's main handicap is that it is dominated by former communists and communists. Mr Berlusconi has understandably made a big issue of this, although the term 'Communist' in Italy does not have the same connotations as it does elsewhere in Europe.

However, Romano Prodi, a former Christian Democrat, had to step down as Prime Minister in November 1998 - a post he had held since April 1996 - because he repeatedly clashed with the left-wing parties that were keeping his coalition in power. This could easily happen again should the centre-left win the election. Another issue that might work against Prodi is the fact that his bloc has proposed a number of tax increases which could persuade voters to back Mr Berlusconi at the last minute.

Professor Prodi's main assets, on the other hand, are that he is considered "a safe pair of hands" - in fact his nickname is mortadella, because he is somewhat bland - and that as Prime Minister in the late 1990s he successfully won Italy's entry into the single currency through fiscal discipline.

The polls are pointing to a Prodi victory but the undecided voters might just pull it off for Berlusconi. Anything is possible in politics.