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Analysis: The challenges facing ProdiBy European Political Editor Robin Oakley  Prodi narrowly won the April 9-10 ballot. RELATEDQUICKVOTEYOUR E-MAIL ALERTS(CNN) -- Silvio Berlusconi's allies seem ready to cede victory to Romano Prodi in the Italian election, even if the outgoing prime minister does not. But when the formalities are concluded in May what sort of task awaits Prodi? How well qualified is he to cope with the problems of a country seemingly split exactly between left and right? He has, of course, been there before. As prime minister from 1996 to 1998, Prodi, nicknamed "the Mortadella Sausage" after the delicacy produced in his native Bologna, was responsible for preparing Italy to enter the single European currency. Then in his next role as president of the European Commission he presided over the formal launch of the euro. During his five years at the Commission, Prodi also oversaw the completion of the biggest single expansion of the European Union, from 15 to 25 countries in May 2004. But although he made more of a mark than his predecessor Jacques Santer of Luxembourg, whose commission was forced to resign en masse over a corruption scandal, Prodi was criticized during his time in Brussels for a lack of communication and organization skills. Some said he was always too focused on his planned return to Italian politics to take on Berlusconi, an impression heightened when Prodi lent his prestige to the Italian center-left campaign in European Parliament elections in 2004 and expressed his opposition to the war in Iraq, not really the kind of behavior expected of a Commission president. As Italy's prime minister, Prodi can be expected to conduct a eurocentric foreign policy, to withdraw Italy's troops from Iraq as soon as he can and to support efforts to revive the EU constitution which foundered after referendum defeats in France and The Netherlands. He is a clear supporter too of the continental social model espoused by France and Germany, with strong job protection measures and an expensive welfare state, a position which leads Italian businessmen to fear that he may not pursue the welfare reforms and labor market flexibility which they believe are required to restore the wallowing Italian economy. In Prodi's election campaign he seemed to promise, for example, to reverse the limited pension reform pushed through by the Berlusconi government, lifting the retirement age from 57 to 60, a policy which appears at odds with his acknowledgment that the new government must act swiftly to cut the budget deficit and public debt. European leaders including E.C. President Jose Manuel Barroso have generally welcomed Prodi even before his formal confirmation as Italy's next prime minister. But already Prodi and his associates are being elbowed by Joaquim Almunia, the EU's economic and monetary affairs commissioner, to get their economic house in order. The problem is that the wordy but imprecise manifesto put forward at the election by a center-left coalition including Socialists, Communists, Greens, Catholics and secular radicals scarcely offered Italy a clear direction of travel, let alone a precise policy program. The significant presence of lawmakers from the far left like the Communist Refoundation's Fausto Bertinotti in Prodi's coalition may too prove a weakening influence on any economic reforms he proposes. They are likely to contest belt-tightening measures and it was Bertinotti who brought down Prodi the last time he was prime minister. Some fear a "Fausto factor." But a Prodi government may not be quite as fragile as his narrow majority in votes would suggest. For a start the new "winners' bonus" electoral system brought in by Berlusconi provided for the winning coalition in the lower house to be awarded extra seats, making government easier. They may have won by only 25,000 votes among 40 million ballots cast, but there will be a majority of 60-plus, even if the margin in the Upper House (or Senate) is wafer-thin. Secondly, the closeness of the victory may concentrate the minds of any fragile allies on the center left who might be tempted to posture or use blackmail tactics. Their followers would be unlikely to forgive them for bringing down the new government, because that would indicate that a center-left administration would take Italy back to the tradition of feeble, revolving door governments of short duration and it might give Berlusconi the chance of a comeback in an early election. This is the second time Prodi has beaten Berlusconi (he did before in 1996) and this time the Left would like the "Cavaliere" to stay defeated. Prodi himself says, perhaps a touch optimistically: "There is the chance to govern for five years." Perhaps it is an omen for Italy that in December the well-padded 66-year-old Prodi completed his first marathon. 
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