After an initial period of dialogue between government and opposition, relations have become strained. Walter Veltroni of the Democratic Party (PD) has declared the period of cooperation to be over. Disagreements have broken out over the government’s plan to limit the use of wiretapping which is far more common in Italy than in any other Western country. But the biggest dispute concerns a proposed judicial measure which the centre-left claims is tailored to save Silvio Berlusconi from prosecution.

Mahmud Ahmadinejad’s visit to the food crisis summit in Rome on June 3 ended in failure as the Iranian president united the entire Italian political class against him. His inflammatory rhetoric found no audience as even the left was appalled by his hysterical anti-Israel outbursts.

In a symbolic move prime minister Silvio Berlusconi held the first cabinet meeting in Naples in order to show solidarity with a city that has suffered for half a year from a severe trash crisis. The new government announced several measures to make the city “blossom again.”

Gianni Alemanno of the People of Freedom list (PDL) is the new mayor of Rome. He defeated outgoing vice premier Francesco Rutelli (PD) by 53.7 to 46.3 percentage points in the direct run-off. Alemanno's victory is the second major triumph for the centre-right in only two weeks after Berlusconi's general election victory of April 14.

Silvio Berlusconi will be Italy’s next prime minister and his margin of victory is bigger than most people expected. His People of Freedom (PDL) movement, the Lega Nord and the small MPA will be able to control both houses of parliament.

Alitalia, Italy’s flagship airline, received another blow in its battle for survival after Air France-KLM walked out of negotiations with the trade unions. Since the Franco-Dutch carrier had been the only bidder left, the company now faces bankruptcy unless the unions are willing to accept Air France-KLM’s conditions for the takeover or another bid is organized soon.

Milan will host the 2015 EXPO after winning the final vote in Paris against the Turkish city of Smirne. The news was received with great satisfaction all over Italy. It comes at the right time to revive optimism in the country after the Naples trash crisis and the bad economic situation had led to “a winter of discontent”.

Silvio Berlusconi has announced that a bid to rescue Alitalia, Italy’s main airline, will be put forward in the next three to four weeks. The bid would involve an Italian consortium led by domestic carrier Air One and possibly some other northern Italian companies.

Italy’s foreign minister, Massimo D’Alema, has enraged the Israeli ambassador by demanding that Israel should start negotiations with Hamas. With the election campaign so far being dominated by social and economic issues, the controversy not only brings foreign policy back to the front pages but also serves to underline the contrasting approaches of Veltroni’s PD and Berlusconi’s PDL to  international politics.

While new data signals a clear economic downturn, record levels of taxation and high inflation, the two main political groups, Silvio Berlusconi’s People of Freedom list (PDL) and Walter Veltroni’s Democratic Party (PD), have presented their respective economic policies for the coming parliament.