On January 24, Italian Prime Minister Romano Prodi resigned following a vote of no confidence against his government in the Senate. This means an end to his centre-left government, which included in its ranks parties ranging from the Christian Democrats to the Communist Refoundation (Rifondazione Comunista).

Prodi’s fall after 21 months in office follows growing disillusionment among sections of the population which had supported his election as an alternative to the hated right-wing government of multi-millionaire media mogul and former prime minister Silvio Berlusconi. Instead, Prodi’s coalition used its supposed “left” credentials to even more effectively pursue policies designed to enrich Italy’s financial oligarchy, while tying the country’s foreign policy securely to the aims of US imperialism.

The Prodi government was stripped of its majority following the departure from his coalition of the Udeur (Democratic Union for Europe), a small Christian-democratic splinter party with three senators. The vote in the Senate on Thursday evening, which degenerated into open squabbles and confrontations, resulted in 156 votes for Prodi with 161 votes against.

Joining Udeur against Prodi was the UDC (Union of Christian and Centre-democrats) led by Pierferdinando Casini. Casini was formerly an ally of Berlusconi, before switching to the Prodi camp last year. Last week, however, Casini broke ranks and publicly called for Prodi’s resignation, proposing instead an “interim government of national unity”.

Clemente Mastella

The Udeur led by Clemente Mastella quit the government, following Mastella’s own resignation as Justice Minister in the face of corruption charges against him. Mastella had at first sought to resign in protest at the treatment of his wife, Mrs. Sandra Lonardo, president of the regional council in Campania. Lonardo had been placed under house arrest following accusations of extortion and abuse of office in connection with the assignment of official posts. A short time later, however, accusations were levelled against Mastella himself: the public prosecutor’s office in the city of Capua Vetere near Naples accused him of aiding and abetting a criminal gang, extortion, abuse of office and a fraud.

Mastella, who has been publicly linked to Mafia figures, is also involved in the garbage crisis in the southern city of Naples. The city is currently sinking under a mountain of 7,000 tons of stinking garbage. City inhabitants are desperate, fear for their health and cannot send their children to school. Prodi sent in police and military units to reopen garbage dumps, which are in many cases situated in heavily populated neighbourhoods.

As Justice Minister, Mastella was the proverbial thief sent to catch a thief. Previously, he was notorious for his Berlusconi-style outbursts against so-called “red” lawyers, who had allegedly created a “climate of fear” in Italy. He is said to have won his post as Justice Minister in 2006 by extorting Prodi with the threat of withdrawing his Udeur party from the government coalition. Nevertheless, Prodi continued to defend him to the last. A week ago, he had tried to dissuade Mastella from resigning.

Only weeks before, Mastella had used his post as Justice Minister to force the resignation of the magistrate Luigi De Magistris from his post in Catanzaro (Calabria). De Magistris was leading an investigation into the fraudulent use of European Union funds and other cases of corruption. The probe had already brought to light several large scandals and was threatening to implicate Mastella himself in using EU money in a vote-buying scheme.

Mastella stood at the extreme right of Prodi’s government. For example, Mastella had declared that the meek attempts by Social Minister Paolo Ferrero (Communist Refoundation) to increase income taxes for the rich by two percent were the equivalent of “proletarian expropriation”.

Crisis of the Prodi government

Mastella’s resignation and the withdrawal of Udeur from the coalition constituted the last straw in the ongoing crisis of the Prodi government. The continuing increase in oil prices and the dollar crisis, combined with the plummeting of the stock markets last week utterly undermined the austerity budgets which his government had so laboriously implemented. Just last week, the government had to downgrade its estimate of a 1.7 percent growth rate for 2008 to just 1.1 percent.

Prodi’s centre-left government consisted of no less than nine different parties from across the political spectrum - from the Left Democrats and Communist Refoundation, which had both emerged for Italy’s former Communist Party to the Catholics of the UDC. In the course of its 21 months in government, Romano Prodi had managed to survive no less than thirty votes of confidence and had repeatedly threatened to resign if his austerity budget failed to receive the necessary support.

Prodi also backed the Italy’s participation in the US-led occupation of Afghanistan—which is opposed by the majority of the Italian population—as well as the expansion of the US military base at Vicenza.

His government also pushed through “reforms” promoting the destruction of pensions and privatization of public enterprises, while imposing austerity budgets. His polices resulted in a compete loss of confidence in his government on the part of the working population

Prodi has sought to take the credit for successfully reorganizing Italy finances, and even on the day of his resignation the president was meeting with foreign investors. On the evening of the Senate vote Prodi had boasted of his successes, in particular his “Welfare Pact”, struck with the Italian trade unions. The Pact involves a series of measures making it possible for the government to reverse decades of concessions to the population in terms of pensions and social welfare.

In October 2007, Prodi set in motion plans for the creation of a new political force in Italy modelled on the Democratic Party in the US. Two of Prodi’s largest existing coalition partners—the Left Democrats (DS) and the bourgeois-Catholic Margherita—are taking part in his new project for an Italian Democratic Party (DP).

The chairman of DP is the mayor of Rome and Left Democrat. Walter Veltroni. Veltroni is playing for time: he supports the proponents of an interim government to bridge the current crisis in the hope of keeping the right-wing parties in check and giving him the breathing space necessary to take over as Prodi’s successor.

Interim government or new elections

The future of the Italian administration is now in the hands of the country’s president, Giorgio Napolitano (CPI), who must choose between an interim government and calling immediate elections. A transitional “technical” or “bridging” government consisting of independent technocrats is the solution also favoured by Fausto Bertinotti—the former leader of Communism Refoundation and the current president of the lower house of parliament, the Chamber of Deputies.

Such an interim government would conduct the business of government until the introduction of a reform of the electoral system. Such a reform is regarded by broad layers of the Italian bourgeoisie to be necessary, in order to increase the influence of the country’s larger political parties and make Italy “more stable”.

One possible successor to Prodi as prime minister is Mario Draghi, the head of the Italian central bank (Banca d’Italia). He was formerly Italian Finance Minister and has worked for the World Bank. As president of the Italian privatisation committee, Draghi played a key role in the sell-off of Italian state companies, e.g., the IRI company, the energy giant ENEL and the state banks, Credito Italiano and Banca Commerciale Italiana.

Draghi drafted a law to facilitate privatisation, the so-called “Draghi Law”, which permits the Italian and international bourgeoisie to sell off state owned property and enterprises. Draghi was a business partner at the investment bank Goldman Sachs until 2006. Based on the new law, the bank was able to take over ENI, Italy’s biggest oil and energy company.

The role of Communist Refoundation

The collapse of Prodi’s government throws a glaring light on the role and activities of one of his coalition partners—Communist Refoundation (RC). This party emerged as a union between a wing of the former CPI and numerous other petty-bourgeois radical groups, and for many years was regarded by many European left currents (including Germany’s Left Party) as a role-model for a refurbished left.

The role of RC was in fact to head off widespread opposition amongst Italian workers and the middle class and divert it into the safe, orderly channels of the Prodi coalition. The RC supported a government, which carried out massive and cynical attacks against the working class and conducted imperialist military missions abroad. The party sacrificed everything to secure the existence of the government: pensions, social welfare assistance, health care, job security and democratic rights.

The balance sheet of this government has only served to strengthen the most right-wing and corrupt layers of the bourgeoisie. Silvio Berlusconi, Italy’s wealthiest man, now sees an opportunity to gain power for a third time—following his forming governments in 1994 and 2001. He is loudly demanding immediate elections.

Prodi took power nearly two years ago promising to annul a series of laws previously passed by Berlusconi which were aimed at protecting his corrupt business interests. However not one of these laws enacted under the Berlusconi government has been removed from the statutes.

On Friday evening gangs of right-wing extremists jubilantly marched through the capital city waving flags and shouting fascist slogans. The scenes in the Senate following the vote against Prodi also took grotesque and obnoxious forms: riotous right-wing deputies popped champagne corks in the chamber, while an older senator of the Udeur, who had sided with Prodi at the last moment, collapsed under a barrage of abuse and had to be carried unconscious from the hall.

If Berlusconi is able to return to power, he will do so openly under the banner of corruption (the defence of Mastella)—a unique development in post-war Europe. Mastella’s Udeur is a splinter party, which won just 1.4 percent of the vote and was a Trojan horse for the right wing from the very beginning.

Broad layers of the Italian population are deeply indignant and frustrated over the political manoeuvres in Rome. They feel betrayed by all of the establishment parties. However, the role of Communist Refoundation has so far prevented this opposition from finding any independent political expression.