Silvio’s Lucky Charm

At his year-end press conference last month, Silvio Berlusconi was as ebullient as ever. The Italian Prime Minister predicted that after a “year of transition,” 2005 would usher in the country’s long-awaited economic turnaround. He was so confident, in fact, that you’d never know he’d just survived a year of crisis. Last June, with the economy sagging, voters gave him a bloody nose in European elections — his Forza Italia party collected just 21% of the vote. Soon after, Marco Follini, the wily Christian Democratic leader, threatened to withdraw his party from Berlusconi’s coalition. Economy Minister Giulio Tremonti’s forced resignation in July fired the hopes of opposition leaders even more. The bluster and bravado that had helped keep Berlusconi in office for longer than any other Italian premier since World War II seemed to be wearing thin

Yet six months later, the Italian leader is once again sitting pretty. What’s his secret? Part of the credit goes to a new, gentler governing approach, as Berlusconi has tempered his outbursts against center-left opponents and found new ways to share power with coalition allies. And part goes to a dapper 69-year-old named Gianni Letta, who has been the engine driving Berlusconi’s slow evolution to a more astute political animal. Letta was a key broker of last month’s make-or-break deal that saw Follini retract his threat and become Deputy Prime Minister. “Perhaps Letta was not the one who convinced Follini, but who reassured him, who told him, ‘Leave it to me. You’ll be covered,'” says one insider. “Even when Follini and Berlusconi were no longer talking, communications were always open with Letta.”

Letta has an official Cabinet title: Undersecretary to the Prime Minister with Oversight on Intelligence Operations. But he is much more than that. The former newspaper editor is Berlusconi’s sounding board and strategist, helping the Milanese media mogul navigate Rome’s innermost circles of influence. Their partnership dates back to the mid-1980s when Berlusconi hired Letta — already a Christian Democratic power broker — as the point man in Rome for his Fininvest holding corporation. During Berlusconi’s eight-month stint as Prime Minister in 1994, Letta joined his political staff but not his Forza Italia. Today, Letta remains aloof from party politics.

One senior Italian diplomat who has known Letta since the 1970s calls him “a perfect example of soft power.” He brings a velvet touch to a government known for pugilism. Enzo Carra, an opposition Parliament member who worked under Letta in the 1970s at the Rome daily Il Tempo, says he is universally respected for his gentilezza and his ability to feel the pulse of Italy’s moderate conservative heartland. “Letta is the man who keeps all channels open,” says Carra. “He is the dove of the Berlusconi administration, but for the opposition he is probably more troublesome than the hawks.”

Outside his ornate office at Palazzo Chigi, the Prime Minister’s headquarters, Letta flashes his Cheshire cat smile at TIME’s request for an interview, citing a long-held decision to never speak publicly about policy: “I prefer to work back in the kitchen,” he says. “There’s no need to come out to the dining room.” Still, Letta is not publicity-shy; he agreed to be photographed, and during breaks in the photo shoot, he displays his knack for cordial conversation without ever breaking his no-comment vow.

The safe return from Iraq of Italian aid workers Simona Pari and Simona Torretta — held hostage for three weeks in September — was another Berlusconi political coup that bore Letta’s fingerprints. The effort was driven by backroom diplomacy, not the showmanship that comes so naturally to Berlusconi. Less than 24 hours before the hostages’ liberation, Letta called in top opposition leaders for a confidential meeting. There was good news: the two Simonas were alive; a satellite had picked up the sound of their voices. Letta played the crackling tape to the opposition politicians. They agreed it was better to negotiate with the hostage takers, who realized they’d been discovered, than to launch a military blitz. Though it fueled suspicions that a ransom was paid (which the government has denied), Letta believed a negotiated handover would help the young women get home safely, which was what mattered most. And keeping the opposition in the loop would provide political cover. “All of the most delicate negotiations,” says one Berlusconi ally, “have the stamp of Letta.”

Along with the reshuffle that brought Follini into the Cabinet, Berlusconi orchestrated a tax-cut plan that gave him his first boost in the polls in well over a year. Here again, Letta played the role of political guarantor, assuring Economy Minister Domenico Siniscalco that the cuts would not put Italy’s credit ratings at risk or push its deficit above the E.U. limit. In one of the few victories 404 Not Found

nginx/1.14.0 (Ubuntu) achieved without Letta’s help, the Prime Minister was cleared last month of bribery charges dating back two decades.

So, with his judicial matters resolved and his coalition stabilized, Berlusconi, with Letta at his side, is planning for the future. He announced a proposal in December to tweak the electoral law in a way likely to benefit his center-right coalition in the May 2006 elections. Even more controversial is his plan to overturn the so-called “equal time” rule that currently bans campaign advertising on television. Berlusconi, of course, owns Italy’s three main private TV stations.

Not everyone is convinced of Letta’s eminence. “Letta is a formidable ambassador,” says Giuliano Ferrara, a conservative newspaper editor and occasional Berlusconi adviser, “but he’s not a real political adviser, not a Karl Rove. Someone who always counsels generic prudence is useful, but it’s incomplete.” And former President of the Republic Francesco Cossiga wonders just how much advice the boss hears. “For someone like Berlusconi, who comes from a modest background and has had that kind of success, it’s hard not to think he’s always right.”

Whatever detractors say, Letta’s boss seems convinced of his talents. At last month’s press conference, Berlusconi mentioned “Dottor Letta” five times (without singling out any other Cabinet Minister), and said Parliament should consider electing him President of the Republic when Carlo Azeglio Ciampi’s term ends in late 2006. Letta, no doubt, would remind his ever-optimistic boss that the first order of business is a Berlusconi re-election.