The future of Prime Minister Romano Prodi's centre-left Italian government was in doubt last night following Sunday's decision by its ultra-left government ally, Rifondazione Communista, to vote against the 1999 Budget Bill.
Rifondazione is not part of the Prime Minister's "Olive" grouping, the second longest-lived government of the post-war period. But Mr Prodi has depended on the party's 34 lower house votes for its parliamentary survival since taking office in May 1996.
After he had consulted with state President Oscar Luigi Scalfaro for 75 minutes yesterday morning, Mr Prodi told reporters that he would present his budget in parliament in a de facto confidence debate due to start tomorrow. He declined to speculate on the outcome.
At first glance, this current crisis looks like a re-run of that which almost brought down the Prodi government last October, when Mr Prodi resigned after Rifondazione refused to back his budget. But he withdrew his resignation following a compromise solution which committed the government both to pension concessions and to the introduction of a 35-hour working week.
This crisis seems similar in that Rifondazione leader Mr Fausto Bertinotti has called for a rejection of the 1999 budget because it does not do enough either to combat unemployment, currently at 11.9 per cent, or to increase health and welfare spending.
This time, however, several factors make a compromise solution along the lines of last year seem unlikely. Mr Prodi has made it clear that if Rifondazione votes against his budget, he will not go looking for votes from outside his coalition but will resign.
Since taking office, Mr Prodi has twice accepted votes from opposition parties in order to force NATO-related legislation through parliament, against the vote of Rifondazione.
Mr Prodi's resignation would logically lead either to a shortterm caretaker government or to early elections.
In an interview in Sunday's Milan daily, Corriere Della Sera, Deputy Prime Minister Mr Walter Veltroni said that while the government did not want early elections, they would represent a better option than the "2,000 somersaults" of a protracted crisis leading to a broad-based coalition.
State President Mr Luigi Scalfaro is extremely reluctant to call early elections, both because they would lead to a period of instability and also because, under the Italian constitution, elections cannot be held during the last six months of the president's seven-year term of office. President Scalfaro's term ends next April, which means that if early elections are to be called the decision must be made before November 25th.
Further confusion is added by the tensions within Rifondazione itself. Yesterday, the party's president, Mr Armando Cossutta, resigned in protest at his party leader's line.
Mr Cossutta argues that, in bringing down the Prodi government, Rifondazione would merely pave the way for a general election victory of the centre-right.