ITALY: The prime minister's lawsuit may prove to be an early joust in a general election contest, scheduled for 2006, reports Paddy Agnew in Rome.
The news that the Italian Prime Minister, Mr Silvio Berlusconi, has launched a €15 million libel suit against the opposition leader, Mr Piero Fassino, inevitably made worldwide headlines. Those familiar with Mr Berlusconi's politically incorrect, shoot- from-the-hip, gaff-ridden style probably signalled this latest initiative as yet another example of his byzantine methods.
In reality, there is nothing whimsical either about Mr Berlusconi's lawsuit or the Telekom Serbia affair which prompted it. In reality, the lawsuit may well prove to be nothing more or less than an early joust in a general election contest, scheduled for 2006, in which Mr Berlusconi is almost certain to be opposed by the current European Commission President, Mr Romano Prodi.
The Telekom Serbia affair began back in June 1997 at a time when Italy was ruled by a centre-left coalition government, headed by Mr Prodi. It was then that the 61 per cent state-controlled telecommunications group, Telecom Italia, bought a 29 per cent share in Telekom Serbia for the price of DM 893 million. In February 2003, at a time when the state's holding in the now-privatised Telecom Italia had dropped to 3.9 per cent, the 29 per cent share package was sold back to Telekom Serbia for €193 million, or roughly half the price.
In the wake of a media campaign, led largely by the Rome-based daily, La Repubblica, the Turin Public Prosecutor's office in February 2001 opened an investigation into the purchase of the Telekom Serbia shares. At the time, the suspicion was that a massive bribe (perhaps DM18 million) might have been paid to the then Yugoslav president Slobodan Milosevic via mysterious accounts in Paribas Bank, Frankfurt and Barclay's Bank, London.
Concerned about the possible squandering of public funds (and suspecting that the Telekom Serbia affair might not reflect well on the centre-left government of Mr Prodi), the centre-right-dominated parliament last July instigated a Parliamentary Commission into the affair.
That commission's work took a major polemical step forwards this spring when a little-known financial adviser and key witness in the Turin investigation, Mr Igor Marini, claimed that Mr Prodi, his foreign minister Mr Lamberto Dini, his deputy Prime Minister and current Mayor of Rome, Mr Walter Veltroni, and Mr Fassino had all pocketed massive kickbacks from the sale.
Mr Marini, currently in prison in Turin on charges of money- laundering in an unrelated case, has claimed that Swiss-based documentation, some of which is currently in the commission's possession, will uphold his claims.
Armed with the Marini accusations, the right-wing press and in particular the Berlusconi family- owned daily, Il Giornale, have accused Mr Prodi of having approved a business deal that not only cost the state exchequer more than €200 million but also served as vital aid to the bloodthirsty Milosevic regime, on the eve of conflict in Kosovo.
For his part, Mr Prodi, in a written reply to a question from a Northern League MEP, refuted all the accusations, point for point. Firstly, he argues that the purchase was made at a time, in the wake of the 1995 Dayton Agreement, when the international community favoured trade with Yugoslavia and when the United Nations had lifted economic embargoes on Belgrade.
It is simply "historically false", writes Mr Prodi, to classify the Telekom Serbia investment as "aid to a criminal regime", given that the investment took place in 1997, two years before the Kosovo conflict.
Secondly, he points out that Telecom Italia took its decision to buy into Telekom Serbia in total autonomy, in keeping with its statutory brief, and did so at a time when it was also buying into state and private telecommunications companies in Bolivia, Brazil, Chile, Cuba, Austria, France, Spain and India.
The EC President furthermore argues that it is ridiculous to say that the deal cost the state exchequer huge sums of money, given that the state had only a 3.9 per cent holding by 1998 and that, throughout the period 1997-1998, the Telecom Italia share price rose.
Mr Prodi also claimed that he had been the victim of a "smear campaign", implying that it had been orchestrated by the Berlusconi media empire. On the same theme, Mr Fassino, one of those accused along with Mr Prodi, last month pointed the finger at Mr Berlusconi, calling him the "puppetmaster" behind the whole anti-left campaign. That remark prompted this week's libel suit.
That remark, too, is one small step in a story that seems sure to run and run, through next summer's European elections and right onto the 2006 general election, by which time Mr Prodi is expected to have resumed leadership of the Italian centre-left. Watch this space.