Brussels braced for the unexpected as Berlusconi takes over

European Diary: Today's handover of the EU presidency from Greece to Italy ought to be a routine affair, with ritual congratulations…

European Diary: Today's handover of the EU presidency from Greece to Italy ought to be a routine affair, with ritual congratulations and promises of another six months of steady achievement in Europe's name, writes Denis Staunton.

But the prospect of Mr Silvio Berlusconi in charge of EU affairs has sent around the dinner tables of Brussels a delicious thrill in anticipation of a semester of gaffes, personality clashes and general unpredictability.

Mr Berlusconi's personal eccentricities and his long-standing antipathy towards the Commission President, Mr Romano Prodi, are likely to provide much entertainment for the European public between now and Christmas.

When Mr Prodi promised not to allow his own distaste for Mr Berlusconi to interfere with the smooth running of the EU, the Italian Prime Minister said gracelessly that it didn't really matter whether the two men got along or not.

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As a founding member of the Common Market, Italy has traditionally favoured deeper European integration. Indeed, opinion polls have consistently shown that Italians have more confidence in EU institutions than in their national authorities.

Mr Berlusconi, however, has been a turbulent partner in Europe who shows little respect for common positions or the need to show unity of purpose. He angered other leaders last month, for example, by meeting Mr Ariel Sharon but declining to meet Mr Yasser Arafat during a visit to the Middle East. This was in clear breach of EU policy, which recognises Mr Arafat as the legitimate leader of the Palestinians.

Shortly after the terrorist attacks of September 2001, Mr Berlusconi undermined a high-level EU visit to Arab countries by declaring that Christianity was culturally superior to Islam. He believes that Russia and Israel should be admitted to the EU and he once called for the Commission to be abolished (he said later he was joking).

Italy's priorities for the next six months are, on the face of it, fairly uncontroversial but each offers its own potential for discord among the 15 member-states. The Inter-Governmental Conference (IGC) to complete the drafting of an EU constitution will begin in October and - if Rome has its way - will end in December. Some governments, including Ireland's, are uneasy at the prospect of such a tight deadline but Italian officials suggest that Mr Berlusconi is determined to complete the IGC's work during his presidency.

Mr Berlusconi hopes to use his good relations with US President Bush to improve the transatlantic relationship and to encourage progress on the road map for peace in the Middle East.

The Italian Prime Minister's cordial relations with his Israeli counterpart may help to dispel some of Israel's doubts about Europe's even-handedness but his approach to the problem is out of step with the EU mainstream.

Mr Berlusconi wants to boost the European economy by raising up to €70 billion from bonds issued by the European Investment Bank for investment in infrastructure projects. But Italy looks set to join Germany and France in breaching the EU's budget deficit rules, casting further doubt on the future of the Stability and Growth Pact.

There will be an initiative to tackle Europe's looming pensions crisis, encouraging citizens to retire later and penalising those who wish to stop working earlier. Some of Mr Berlusconi's critics suspect that he hopes to use the initiative to shift Italy's own pensions burden onto the EU, a move that will be resisted by some of his partners.

Italy wants to work with north African countries to stop illegal immigrants crossing the Mediterranean into Europe, and Mr Berlusconi is expected to revive a controversial proposal to set up holding centres for asylum-seekers outside the EU.

The European media have greeted the Italian presidency with a flurry of unflattering portraits of Mr Berlusconi, who appears on the cover of Der Spiegel this week under the headline "The Godfather". Italian officials insist that, despite his eccentricity, Mr Berlusconi is a democratic politician and Italy remains a healthy democracy.

A court in Milan yesterday shelved a corruption case against the Prime Minister, citing a law passed last month granting him immunity from prosecution until he leaves office.