Italy’s official AGI news service has reported in graphic, blow-by-blow detail yesterday’s stormy parliamentary proceedings in a ‘debate’ (that term applies only loosely in Italy) over strategy and state interference at Telecom Italia. Prime Minister Romano Prodi was shouted down by opponents when he referred to a possible “renouncing [of[ part of my professional history...”. Parliament was eventually suspended.

Earlier, Prodi had said: "I repeat here and now that I was never informed of any plan on Telecom Italia and have never had any direct knowledge of other hypotheses produced these months to help one of the most important companies in Italy to find the road to growth."

Opponents, led by opposition leader (and interested party) Silvio Berlusconi. are attempting to turn what Prodi may or may not have done into a resignation issue. There is little chance of that happening just now.

Prodi said: “we have always known that it's not up to the cabinet to draw up corporate plans and strategies. That's up to the management and shareholders. Which doesn't mean, however, that the government can ignore a private company's fate, even if it must respect its autonomy. That surely goes for an important company such as Telecom."

Prodi acknowledges frequent contacts between his government and senior figures from Telecom Italia, but insisted yesterday that “the plan was never mentioned.” The plan in question is for TI to break itself in three, its focus being on a new media company with Rupert Murdoch’s News Corp and the possible sale of its fixed-network business, its mobile arm, or both. That raises the prospect of foreign owenership of these valuable assets and that is what Prodi does not like.

This ‘strategy’ stems from the need by TI’s current owners, led by Pirelli, to service their debts. In fact, as strategies go, there is little that could be described as ‘strategic’ about it at all unless you count corporate greed as a strategy. Don’t worry... this one has legs.
Jim Chalmers