The May 2001 election, where both coalitions used decoy lists to undermine the proportional-compensation part of the electoral system, ushered a refashioned center-right coalition, House of Freedoms dominated by Berlusconi's party, Forza Italia (29.2%) and including Alleanza Nazionale (12,5%), the Lega Nord, the Christian Democratic Center and the United Christian Democrats. The Olive Tree coalition ( The Daisy (14,5%) and the Democrats of the Left (16.7%)) sat in the opposition. in Genoa, Italy by burning vehicles on the main route to the summit.]] Berlusconi's II foreign policy was characterised by a strong atlanticist trend, coupled with a positive attitude towards Putin's Russia and Erdogan's Turkey. Berlusconi advocated the accession of Turkey to the EU (notwithstanding the opposition of coalition partner Lega Nord) and at the 2002 Rome summit a NATO-Russia Council was set up.

In UN reform issues, Italy took the lead of the Uniting for Consensus group, aiming at blocking a new German seat at the UN Security Council, while advocating for a unitary EU seat The 27th G8 summit, held in Genoa in July 2001 represented the first international task of the government. The huge protest, mounting to 200,000 demonstrants from all over Europe, was countered by strong police repression. Dozens were hospitalized following clashes with police and night raids by security forces on two schools housing activists and independent journalists. People taken into custody after the raids have alleged severe abuse at the hands of police. One demonstrator was shot dead.

Berlusconi made Italy take part in the Afghanistan war (2001) and in the US-led military coalition in Iraq in 2003, although always stressing that Italy was taking part in a "peace operation" and not in a war operation outside the UN framework (prohibited by art.11 of the Italian Constitution). The move was widely unpopular (especially in the case of Iraq), and was met by protests and manifestations. Italy's participation in the Iraq war, with the control over the Nassiriya sector was marked by the 2003 Nasiriyah bombing, in which 17 soldiers were killed, and by an incident with the US, concerning the death, by friendly fire, of a SISMI agent, Nicola Calipari, during the March 2005 rescue of Giuliana Sgrena, a reporter from Il Manifesto.

In labour law, the government introduced extensive flexibility through the 30/2003 Act. In the field of justice, a reform of the Right of self-defense Act was introduced to please the Lega Nord. The 2002 Bossi- Fini Act represented a restrictive approach to immigration, while the 2006 Fini - Giovanardi Act strengthened the prohibitionary approach to drug policy. A point-system driver's licence was introduced in 2003, and compulsory conscription was replaced by a professional army since 2005. A constitutional reform including federalization and strengthened executive powers, passed in the Parliament, was rejected by a confirmation referendum in 2006. Berlusconi's term was widely criticised for the approval of ad personam (personal) laws (usually named from the rapporteur minister or MP), especially in the field of justice, such as:

  • the Frattini Act on conflict of interest;
  • the 2002 Cirami Act on the recusation of judges by the accused;
  • the 2003 Schifani Act, shielding the five highest state posts from criminal proceedings (declared unconstitutional in 2004);
  • the 2005 ex-Cirielli Act, about statute of limitations, especially applicable in the case of Cesare Previti, Berlusconi's lawyer;
  • the 2006 Pecorella Act, making it impossible for the public prosecutors to appeal a sentence of acquittal(partially declared unconstitutional in 2006);
  • the de-criminalisation of false accounting;
  • the Gasparri Act on the radio & TV market, making it easier for Mediaset to escape roof limits of advertisement collection, and considered not in compliance with EU Law by the EU Commission;

Internally, Berlusconi set up the Mitrokhin Commission, directed by senator Paolo Guzzanti (Forza Italia), to investigate on alleged KGB ties by left-wing (then-opposition) politicians. The Commission, closed in March 2006 without producing a final report, was very controversial, in particular after claiming that Romano Prodi, at that time Prime minister of Italy, and former President of the European Commission, had been "KGB's man in Italy." One of the Senator Guzzanti's informants, Mario Scaramella, was arrested at the end of December 2006 for defamation and arms-trade. A new electoral law was established in 2005 by the Calderoli Law, and it is a form of semi-proportional representation. A party presents its own closed list and it can join other parties in alliances. The coalition which receives a plurality automatically wins at least 26 seats. Respecting this condition, seats are divided between coalitions, and subsequently to party lists, using the largest remainder method with a Hare quota. To receive seats, a party must overcome the barrage of 8% of the vote if it contests a single race, or of 3% of the vote if it runs in alliance. The change in the electoral law was strongly requested by the UDC, and finally agreed by Berlusconi, although criticised (including by political scientist Giovanni Sartori) for its comeback to proportionalism and its timing, less than one year before general elections. Provision was also included, on the input of Mirko Tremaglia, to ease the vote of Italians resident abroad; paradoxically, Italians abroad proved crucial in securing centre-left victory in 2006 elections.


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