MICHELE NORRIS, host:
From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.
MELISSA BLOCK, host:
And I'm Melissa Block.
There was a political shakeup in Italy today. Prime Minister Romano Prodi handed in his resignation to Italy's president. This after he lost a vote of confidence in the Italian Senate. Now, the president will have to choose -either create an interim government to reform the election law or call an immediate election as demanded by the opposition.
NPR's Sylvia Poggioli joins us from Rome. And Sylvia, Romano Prodi was about 20 months as prime minister. What led to his government's collapse here?
SYLVIA POGGIOLI: Well, the crisis was triggered by last week's resignation of Justice Minister Clemente Mastella after magistrates began a corruption investigation against him and his wife. He also withdrew his party's support from the government, claiming it had not shown him sufficient solidarity. But the situation really is much more complex than that.
The Prodi government was a very shaky nine-party coalition that ranged from Catholic centrists to extreme leftists. And throughout its 20 months of existence, Prodi had to constantly mediate between these ideological extremes over fiscal issues, over welfare benefits, over the deployment of Italian troops in Afghanistan and Lebanon.
And the crisis really exploded as the government was about to tackle electoral reform that would favor big parties. And so many of the smaller parties were afraid they'd be left out of parliament. And several deputies voted against Prodi today in the hopes of early elections with the current law.
BLOCK: And is there any indication of whether the Italian president will actually call a snap election?
POGGIOLI: We don't know that. President Napolitano, who has the sole power to dissolve parliament and call a vote, has made it very clear in the past that he does not want Italy to go into another election with the current law, which was passed by the previous government of media tycoon Silvio Berlusconi. And it - which - it has created this unprecedented political instability. The law is so awkward that the Prodi government had a wide majority in the lower house but just barely scraped through in the senate.
It's possible that Napolitano will want an interim government with the sole task of passing a new electoral law before going to elections. He might even tap Prodi for this job or choose an institutional figure, someone above the political fray.
BLOCK: You mentioned former Prime Minister Silvio Berlusconi there. If there were to be elections now, is it possible he could return to power?
POGGIOLI: Well, some polls suggest that he is in the lead, but Berlusconi will not have smooth sailing to the next elections because he has strongly alienated his two major former allies on the right. They're tired of Berlusconi's showy antics and the way he hogs the stage and dismisses his junior partners in the coalition. And there've been some pretty heated public arguments. The other right-wing parties are kind of reluctant to have Berlusconi again as their coalition leader.
And now, Berlusconi also is under investigation for attempted corruption. He's suspected of having tried to buy the votes of several MPs in Prodi's coalition. But you know, Berlusconi can take advantage of Prodi's failure to pass a law on conflict of interest, which he had long promised. Berlusconi is a very powerful man. He has total control over, at least, 50 percent of Italian TV and immense wealth. So he can pretty much call the shots in the political arena.
BLOCK: Sylvia, whichever way this works out, what will be the major problems that this new government has to face?
POGGIOLI: Well, first of all, the economy. Prodi takes credit for lowering Italy's huge debt and for cracking down against tax evasion. But despite these improvements, Italy still has the world's third largest debt after the U.S. and Japan. The economy is stagnant. Organized crime is stronger than ever. Bureaucratic red tape is suffocating many small businesses. The Financial Times has written that while foreign investment is growing throughout Europe, it has dropped 28 percent in Italy. Italy's international image has suffered a lot recently due to the garbage crisis in Naples. And Italians' trust in all major institutions, from parliament to the Catholic church, is at a record low.
Italians are in the grips of a serious malaise. People are insecure about the future. And polls suggest that they are the most unhappy people in Europe.
BLOCK: Sylvia, thanks so much.
POGGIOLI: Thank you.
BLOCK: That's NPR's Sylvia Poggioli in Rome.