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Cablegate: Veltroni to Remain Captain--For Now, but Pd Is

DE RUEHRO #1192/01 2680850
R 240850Z SEP 08

C O N F I D E N T I A L SECTION 01 OF 02 ROME 001192


E.O. 12958: DECL: 09/10/2018

Classified By: Ambassador Ronald P. Spogli for Reasons 1.4 (B) and (D)

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1. (C) Having led the Democratic Party (PD) into defeat in
national and local elections this spring, Walter Veltroni is
proving no more adept in opposition. Veltroni has lost much
of his support within the party and has until next spring's
European Parliament elections to salvage his position and
retain leadership of the party. Local elections this fall
will be an uphill battle for Veltroni, and although they have
a different dynamic than national trends, they will foster
the notion of Veltroni's weakness. Possible successors,
including former Foreign Minister Massimo D'Alema, are not
challenging Veltroni's position directly for the moment.
Regardless of Veltroni's fate, the PD will endure, but will
need to adapt to be a viable electoral challenger to the
center right. End Summary.

Uncertain in Opposition
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2. (C) After the April 2008 defeat, Veltroni has appeared
uncertain on strategy, trying out several tactics with little
success. Shortly after the election, Veltroni created a
shadow cabinet to strengthen internal discipline and develop
policy expertise. Although a somewhat innovative move in
Italian politics, the shadow cabinet failed to capture the
attention of the media, and leading PD figures assailed it
both because it discounted the value of coalition allies and
because it bolstered Veltroni's leadership position.

3. (C) Veltroni sought to enhance his profile as a new-style
politician by shying away from harsh attacks on Prime
Minister Silvio Berlusconi while announcing that he wanted to
find opportunities to cooperate. Given the center-right's
ample majority, it has not had to reach across the aisle to
work with PD. Furthermore, Veltroni opened up his left flank,
giving erstwhile coalition ally Antonio DiPietro and his
Italy of Values party an opportunity to gain ground through
populist attacks on the government. DiPietro, who has also
launched withering attacks on Veltroni, will siphon off votes
from the PD in local elections this fall and in the European
Parliament elections unless PD and IdV reach a new accord.

4. (C) To distract public attention from PD's internal
squabbles, in July Veltroni launched the symbolic signature
drive &Let,s Save Italy8 with a goal of gathering 5
million signatures by October 25, when the effort will
culminate in a large demonstration against the government.
The initiative started off with a few negative notes as some
local PD officials announced that they would not sign the
petition because it would jeopardize their relations with the
national government. Thus far, the initiative has had a
limited national profile. A leading political commentator
also warned that rooting a petition in a critique of
Berlusconi rather than a positive agenda could backfire if a
majority of the public continues to assess that Berlusconi is
going in the right direction.

5. (C) PD officials are pessimistic and dispirited, feeling
that Veltroni has done little to unify the new party, either
by developing a consensus among the party heavyweights or
forging a new PD culture after the union of the
post-communist Democrats of the Left (DS) and the Daisy
party, which emerged out of the left-wing elements of the
centrist Christian Democratic party. In an August 4 meeting
with the Ambassador, Senator Franco Marini described the PD
as ""leaderless"" and said that ""Veltroni is no Obama."" Critics
say that Veltroni has been too authoritarian, failing to
listen to the opinions of the different strands of the party.

Upcoming Challenges
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6. (C) PD's national election defeat in April was followed by
a loss in the Rome mayoral race and then defeats in local
elections. That losing streak is set to continue this fall,
albeit in races with limited national significance. PD is
expected to lose in votes in Trentino in October and Abruzzo
in November. The continuing losses will give Veltroni's
critics plenty of room to continue beating Veltroni up in the

7. (C) The center right has an aggressive legislative agenda
to take advantage of the government's popularity and the
opposition's disarray and, thus far, has effectively stifled
opposition attempts to amend or delay legislation. Veltroni's
best chance to demonstrate his relevance is to make good on

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his promise to have an effective dialogue with the government
and influence the government's top legislative
priorities--fiscal federalism, judicial reform, and a new
electoral law for the European Parliament elections. The
center right also would have something to gain by working
with Veltroni on these issues as the center left has levers
to complicate judicial reform if the government pursues a
constitutional amendment, given the center-left's influence
within the judiciary. On fiscal federalism and a reform of
the electoral law, Veltroni and the center right would be
likely to find some common ground, allowing Berlusconi to
enhance his profile as a statesman by working with the
opposition and Veltroni to potentially strengthen his
position within the party by showing the rank and file that
he can get results.

No Reason to Knock off Veltroni--Yet
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8. (C) Veltroni has until the European Parliament elections
to turn things around. The aspirants to Veltroni's throne
know that there is nothing to be gained through a palace coup
at this point. Instead, they would prefer that Veltroni stay
in place to take hits from the left and right and absorb the
defeats in the administrative and European Parliament
elections. For now, Veltroni faces his harshest critiques
from the periphery--Turin Mayor Chiamparino said PD risks an
implosion; Venice Mayor Cacciari said the PD is so weak that
it doesn't even really exist in northern Italy. However, the
heavyweights in Rome have been more understated in their
criticism, a sign that they are not ready for a leadership
change just yet.

9. (C) D'Alema is best positioned to challenge Veltroni for
leadership. D'Alema has criticized Veltroni's tactics and
leadership style. Should D'Alema launch a formal challenge,
it would come in the form of calls for a party congress or
even outright demands for a leadership change. These calls
could come from D'Alema or his ally former Economic
Development Minister Pierluigi Bersani, or D'Alema's top
lieutenants--Nicola LaTorre or Luciano Violante. Party
officials and journalists are discussing many post-Veltroni
scenarios, including ones in which PD is led by someone
without DS or Daisy baggage or by a young rising star,
although no credible names in either category have been
widely circulated.

The View from where Veltroni sits
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10. (C) In a July 29 meeting with the Ambassador, Veltroni
dismissed internal rumblings about the future of the PD as
the nervousness of young politicians inexperienced in the
normal upturns and downswings in party fortunes. The press
reports that Veltroni believes he is at a low point and will
manage to regain some consensus during the fall legislative
battles. He is also banking on center-right slip ups,
including in the restructuring of Alitalia in which the
center right has to negotiate with the interests of the
entrenched unions. Italy's tenuous economic situation could
lead to other cracks in the coalition as the government seeks
to make some budget cuts.

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11. (C) The first indicator of Veltroni's viability will be
this fall's local elections, which have a different dynamic
than national trends, but will be a struggle for Veltroni and
will give his critics more ammunition. Then, the May 2009
European Parliament elections will be of paramount
importance, and Veltroni will not survive as party leader
unless PD turns out a stronger performance than now expected.
If the PD shows gains in that election, Veltroni's position
will be strengthened significantly and he will keep his job.
In the meantime, he could help his case by scoring
legislative victories by working with the center right to
shape legislation in ways that PD members judge to be
victories. A final key factor is whether the center right
stumbles and offers Veltroni an opening, which could come in
the form of coalition squabbling or unpopular economic
reforms. Over the long run, a strong PD is in America's
interest because it is a center-left party that isolates the
more populist and shrill far-left elements that have
consistently been troublesome in center-left governments.


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