Romano Prodi Opens Up

By Maria Bartiromo

Since he won election last April by a narrow margin over Silvio Berlusconi, Italian Prime Minister Romano Prodi has made more waves than a powerboat in Venice. As a former Prime Minister and former president of the European Commission, he is no stranger to global politics. But Prodi remains outspoken. In September, he found himself in the middle of a business blowup after Telecom Italia (TI ) Chairman Marco Tronchetti Provera resigned amid accusations that he had misled Prodi about the direction of the company.

You beat Silvio Berlusconi by a small margin. Do you feel you have a mandate to lead?

Did the President of the U.S. have a mandate to lead? His margin was even smaller. When you win, you win.

How are you planning to jump-start the sluggish Italian economy?

I already started. Italy, in my opinion, has a group of corporations that are strong but separate from others because of special privileges.... So I've started to break this up. And I shall work step-by-step [to create] more competition. [Also,] tax evasion is at indecent levels. How can you run an economy if all the weight is on the shoulders of 60% of the population, and the others don't pay?

There is increasing discontent in the European Union. How is it possible to have one central bank and one currency for such different economic stories?

This is what I repeated for years and years. It's very simple: Monetary policy without some sort of economic policy may be dangerous.

There has been speculation that your government pushed out the chairman of Telecom Italia because you did not agree with his restructuring plan.

That is completely, completely, completely untrue. This was something very unfair...Tronchetti Provera asked for an appointment with me. He didn't tell me about all of the different things he was working on. Then he announces this big decision [to possibly split Telecom Italia Mobile from Telecom Italia and sell it] know, to give the idea that the government had known about it. I didn't know anything about what Tronchetti decided--and I didn't say no or yes to his decision. But I said if you call your Prime Minister and ask for a meeting with him, you must tell the truth.

Did you exert political pressure on Telecom Italia to adopt a different business plan?

No, 100%.

Did you release inside information about whom Telecom Italia was talking to [said to be News Corp. (NWS ), GE (GE ), and Time Warner (TWX )]?

Never. Never. When? When? I simply said that I was astonished [by the decision to sell the mobile unit]. But anybody would be astonished...

Will the government take a stake in Telecom Italia again? Some might view that as a step backwards toward nationalism.

[Before the blowup] the situation was absolutely stable. And so there was no plan by government because there was no need for a plan. Of course, after this event, you have to think it over.

Telecom Italia Mobile is the last of Italy's four mobile networks still in Italian hands. Are you trying to keep it that way?

I am not nationalistic. If it goes to foreign hands, I am sorry. But that's life. The same goes for banking and so on. But while I want to run a modern country, a country open to the markets, I don't want always that my companies are bought by foreigners. Sometimes bought and sometimes buying.

Whether it is banks or telecom, do you sense a renewed nationalism and protectionism?

I don't think we have demonstrated ourselves to be a closed country. What [we need]...are energetic entrepreneurs working within a clean system...We can be leaders in Europe.

Maria Bartiromo is the host of CNBC's Closing Bell.

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