Italy's centre-left ruling coalition yesterday began a five-day countdown to Tuesday as it desperately tried to head off a government crisis which not only threatens to bring down the 17month-old government headed by the Prime Minister, Mr Romano Prodi, but may also jeopardise Italy's participation in European Monetary Union (EMU).
Mr Prodi is due to address the Chamber of Deputies on Tuesday on the background to the crisis provoked by the decision of the government ally, the hardline leftwing party, Rifondazione Communista, not to support the government's $14.5 billion deficitcutting budget for 1998. Since winning the 1996 general election, Mr Prodi's "Olive" coalition has depended on the 35 lower house votes of Rifondazione for its survival.
The weekend is sure to see torturous negotiations between Rifondazione and the former communist Democratic Left (PDS), the largest party in Mr Prodi's government. If those negotiations should fail, then Mr Prodi's government seems certain to fall next week, initiating a period of political uncertainty which may result in early general elections.
Many financial analysts yesterday rejected speculation that Italy may seriously compromise its entry into EMU, believing the government will find a solution for what one trader called "a routine spat for Italy".