Prodi hopes to end five-day crisis with new cabinet lineup

Italy's five-day government crisis, provoked by last Thursday's collapse of the 17-month-old, centre-left coalition government…

Italy's five-day government crisis, provoked by last Thursday's collapse of the 17-month-old, centre-left coalition government of he Prime Minister, Mr Romano Prodi, may resolve itself today with the recomposition of Mr Prodi's Olive coalition.

Mr Prodi's government fell last week when its allies, the hardline left-wing party, Rifondazione Communista, refused to support the government's 1998 Budget, apparently over objections to $3 billion worth of social welfare cuts contained in the $14.5 billion deficit-cutting budget.

Although Rifondazione holds no government seat, Mr Prodi depended upon Rifondazione's 35 votes in the Lower House for its survival.

Following a weekend of conciliatory signals from Rifondazione, the cabinet under-secretary, Mr Enrico Micheli, yesterday met the leader of Rifondazione, Mr Fausto Bertinotti, for talks which Mr Micheli described as "positive".

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Earlier in the day, Mr Bertinotti received a surprise mandate from his party calling on him to open negotiations with Mr Prodi's current caretaker executive.

Last night, President Oscar Luigi Scalfaro, the arbiter of the current crisis, met Mr Prodi and is believed to have called on the him to make one last effort to reconstitute his government - given the apparent willingness of Rifondazione to negotiate.

Although Mr Prodi has ruled out any major changes to his budget, the Olive coalition and Rifondazione may arrive at a compromise whereby Rifondazione votes for a virtually unchanged budget in return for a government pledge to initiate legislation introducing a 35-hour working week.

The 35-hour week was one of a series of counter-proposals - 300,000 new jobs in the South, no seniority pensions cuts and reduced prescription charges were among the others - formulated by Rifondazione last week.

Nationwide negative reaction to the current government crisis and to the possibility that it may compromise Italy's inclusion in the start-up of European Monetary Union may have played a significant role in the apparent change of mind by Rifondazione.

The immediate political future may become clearer today when President Scalfaro concludes five days of negotiations with all the major parties.

Meanwhile, the Olive coalition received a welcome boost yesterday when a survey carried out by Milan daily Corriere Della Sera concluded that Mr Prodi would have a good chance of winning a fresh general election, with the support of the former anti-corruption magistrate, Judge Antonio Di Pietro.