Friends and comrades,

what follows is not a fully-fledged report, but rather a detailed outline of the problem that the party has to face and the decisions that it has to take. The report, the accounts, and the appendices have been distributed and are in any case available to all those who are present at this Congress, whether they be members or not.

The Italian party system, as many of you know, is in the midst of the most serious crisis it has ever experienced, a crisis which centres around the problem of party financing, thanks to the serious efforts of a small number of magistrates and to the forthcoming referendum, promoted by the Radical Party, for the abrogation of the law which provides for state financing of political parties. This may be the final crisis before the Reform, but it may be something quite different. We Radicals know what we have stood for in Italy, on this issue as on others, through our history, our individual stances, our collective decisions, and our political struggles. I will not speak about this problem in my report, because I am firmly convinced that the best way to do so is by confirming what makes us different, the fact that our Congresses are opened by the Treasurer's report: a report which is all the more political to the degree that it give the members of the party the facts to express their judgement, through the vote

on the accounts, and to take the important decisions for which this Congress has been convened.

For the Radical Party, awareness of the financial situation of the party has always been a necessary tool for the organization of political struggle.

First of all, I had better begin with the clarification of a technical point which is of fundamental importance with regard to the matters we are called upon to discuss.

In my reports to the meetings of the Congress and the Federal Council, as well as the party accounts as such I have always presented the facts and the relative analysis of what I called "the overall resources of the party", referring above all to the party headquarters and the company which owns them, Torre Argentina S.p.A. On this occasion, too, as well as the accounts of the party as such I have made available to Congress the forecast accounts of Torre Argentina S.p.A., and the financial situation of both (Appendices 3,4,5).

We have, in this way, taken account of the overall resources, that is both the resources on which the party can count directly and the resources which, although they are not formally speaking under its direct ownership, can effectively be considered as part of the patrimony of the party itself.

It is worth pointing out that I use the expression "overall resources on which the party can count", rather than "the property of the party", in order to respect the legal form of the relationship between the party and the company which owns the headquarters. The company, in fact, was set up in 1987 with money supplied by the party to Sergio Stanzani and Paolo Vigevano, who are the formal owners, although they were legally bound to use the sums of money supplied to them for a specific purpose.

The company which owns the party headquarters also provides services which are essential to the running of the party and, with legal contracts, the staff necessary to carry out essential tasks such as the switchboard, secretarial duties, the administration and the running of services, and the commercialization of the rights of both Agorà and the Media Watch Centre (see Appendix 7, page 26, 27 or 28 depending on the version).

Therefore, although Torre Argentina S.p.A. is not directly owned by the party, we have to take account of its economic situation and of its patrimony in the illustration of the overall framework of resources and requirements.

Having said that, there is very little to add to the contents of the reports approved by the Federal Council in Zagreb at the end of October 1991 and by the first session of this Congress in Rome at the beginning of May 1992.

Unfortunately, despite the containment of the overall financial requirements, the gravity of the forecasts made on those occasions has been confirmed. We come to this Congress with a balance between debts and credits, a current financial requirement, of 4,357 million lire ($3,533,527) at the end of December; taking into account expenditure in the first two months of 1993, this figure will reach 5 billion lire ($4 million) by the end of February.

On the occasion of the first session of this Congress we had forecast a positive balance for the end of April which, including the predicted income until the end of the year, amounted to 800 million lire ($650,000). Compared to the forecast, in the following ten months we had to register expenditures which involved payments and commitments for 4,916 million lire ($3,987,000); added to the mortgage debt this brings the total debt at the end of February to over 5,750 million ($4,660,000); subtracting the positive balance of 800 million ($650,000) at the end of April this brings the current requirement to the aforementioned figure of 4,957 million lire ($4 million).

In the appendices to the report and to the accounts - which are submitted for the approval of this Congress - you will find a detailed presentation of outgoings, of fixed expenditure and variable expenditure, of the costs of activities (see Appendix 7, page 21), as well as of the overall financial requirements (see Appendices 4 and 5, pages 15 and 18).

With respect to the forecast for the whole of 1992, not only on the occasion of the first session of this Congress in Rome but also on the occasion of the meeting of the Federal Council in Zagreb, the seriousness of the financial and economic situation has been confirmed despite the containment of some of the most significant items of expenditure and the higher total income.

At that time we forecast an end-of year requirement for 1992 of 4,500 million lire ($3,650,000), which together with the payments on mortgage and investments gave a total requirement for 1992 of 6,300 million lire ($5,100,000) (see Appendix 5, page 19).

With respect to the forecast, we attempted to contain expenditure by suspending the publication of the newspaper "The New Party" from July; the cost of the newspaper was thus reduced by about 600 million lire ($485,000). The 400 million lire ($325,000) expenditure predicted for meetings of the Federal Council was eliminated, since the Federal Council met only once on the occasion of the first session of this Congress, whilst expenditure on political initiatives and demonstrations was 600 million lire ($485,000) less than predicted.

The growth of the party, especially in other countries, which led to a fivefold increase in members outside Italy (from 1,435 to over 7,600) with respect to the previous year also involved the start of significant activity on the part of members, and therefore the need to organize assemblies and demonstrations; above all, it became necessary to increase the network of party headquarters, or rather equipped offices, which we have founded in these countries: during 1992 the number of such offices reached eleven. As well as those which already existed in Budapest, Moscow and Prague, further offices were set up from the end of 1991 in St. Petersburg, Kiev, Baku, Bucharest, Zagreb, Sofia, Warsaw, and Ougadagou. In some cases the party "headquarters" are small offices with some equipment, not always open, but most of them are fully-fledged headquarters with permanent staff. The organization and the running of these offices involved extra expenditure of about 450 million lire ($365,000).

The growth in the number of members in other countries also made it necessary to transform the services that had been created for the production of the newspaper into a permanent part of the party structures, and also made it necessary to increase the number of staff and the use of the services already available - the Agorà network, the membership data bank, and naturally the telephone. This increase in expenditure amounted to 600 million lire ($485,000). The largest increase, however, was caused by the additional session of the Congress, which has involved extra expenditure of 1 billion lire ($800,000) with respect to the amount forecast. Therefore, although expenditure has been contained by 1,600 million lire (1,300,000) on certain items, the variations that were not expected, and that in some cases could not be predicted, have led to a final expenditure which is 450 million lire ($365,000) higher than the 7 billion lire ($5,700,000) forecast.

It has been possible, however, to contain the overall end-of-year requirement to a considerable extent as a result of the total income, which was 2,440 million lire ($1,980,000) higher than forecast. Membership fees and contributions from members during the period brought in around 900 million lire ($730,000), whilst contributions from non-members, mostly in support of the referendum campaign which ended in January 1992, amounted to more than 400 million lire ($325,000).

A decisive contribution to the financing of the party's activities in the second half of the year, a contribution which could not be predicted at the time, came from the Lista Pannella, which gave the party around one billion lire, almost all of its own resources. Overall, taking account of a further positive balance in income of 130 million lire ($105,000), the total financial requirement was 1,850 million lire ($1,500,000) lower than the 6,300 million lire ($5,100,000) predicted.

Despite this, the current financial position of the party is more serious than it was at the end of 1989, when, at the beginning of the phase of extraordinary management of the party, we set out on our attempt to restore financial health through the suspension of all party activities. At that time state financing, that is the contribution made by the Italian state to parties represented in parliament, was still available for the following year (a sum of around 3 billion lire - $2,450,000). Today this is no longer possible. The Lista Pannella, in order to turn its contribution over to the party, had to take in advance almost its entire quota for 1993, which is in any case only half of the contribution received by the party at that time. Moreover, compared to that occasion, when the suspension of party activities eliminated the expenditure on the political and organizational structure of the party, today the permanent outgoings necessary to ensure the transnational activity of the party have a cost which, adde

d to the cost of Agorà and the Media Watch Centre, amounts to over 4 billion lire.

The level of debt now reached is only guaranteed by our properties and movable goods (furniture and equipment), which are registered in the accounts with a value of 4,600 million lire ($3,730,000), although their real value is undoubtedly much higher.

If we decide to face the 1993 financial year in these conditions, counting only on a small predicted income - no more than 2 billion lire ($1,600,000) compared to requirements of between 8 and 10 billion lire ($6.5-8 million) - such a debt on the patrimony would have only one certain result: bankruptcy.

It is also extremely difficult to evaluate the potential contribution to the party of other companies such as Radio Radicale and the television channels.

In addition to the resources of the party and those of Torre Argentina S.p.A., there is also Radio Radicale and the television channels. The nature of these companies and of their legal relationship with the party are different from those outlined above with regard to Torre Argentina S.p.A. They are, in fact, companies which in the past received the state contribution which the Congress had decided not to spend on its own activities, which were to be covered only by independent income (self-financing).

The legal relationship between the party and these companies (Radio Radicale and the television channels) was of reciprocal and complete political and organizational independence. The party, in fact, gave them its state contribution without laying down conditions of any kind.

Thanks to the contribution of the party, these companies were able to establish and develop their activities and, when the contribution was no longer available, had to find the means for financial survival in the various sectors in which they operated and continue to operate.

On the basis of a law presented "ad hoc" by the majority of the parliamentarians of all the parties represented in the Italian Parliament (both in the Chamber of Deputies and in the Senate), in 1990 Radio Radicale was given an extraordinary contribution of 20 billion lire (16 million dollars) in recognition of its role as a public service, the only radio station in Italy which provides full coverage of parliamentary debates and the congresses of all the political parties. This extraordinary contribution allowed Radio Radicale to pay off the debts accumulated in the previous years, to reorganize and consolidate its technology and news broadcasting services and to cover its losses in the following three years.

Today Radio Radicale is able to exist thanks to the contribution which the state awards to stations that are "recognized as party organs".

However, only full recognition, including economic recognition, in a permanent manner and not on a one-off basis as in 1990, of its role as an organ of information of general interest, through the stipulation of agreements and contracts with the Italian institutions for the broadcasting of parliamentary debates, can now assure the growth and the existence of Radio Radicale.

The two television channels, the local commercial channels Teleroma 56 and Canale 66, which survive exclusively on advertising, are now having to face up to the serious crisis in the advertising market and in programmes which, after the law on TV broadcasting, has further reduced the resources available to local channels.

These companies cannot be considered as part of the patrimony of the party, neither formally nor in substance, and therefore the party cannot take decisions which are formally and in substance the responsibility of the owners and the directors of the companies themselves.

The party can, however, count on the fact that Sergio Stanzani and Paolo Vigevano, who were awarded the contribution by the party and who used it to set up Radio Radicale and the television channels, of which they are now owners, both as a result of their political backgrounds and the way they have run both the radio station and the TV channels, have a link, now including a formal link, with the party which will undoubtedly lead them to do all they can to ensure its survival.

However, if we want to evaluate the contribution that the sale of these companies could make to the financial future of the party, we have to enter a field in which it is difficult, and in some respects impossible, to make definite judgements.

The precarious state of the broadcasting sector in Italy, which affects both radio and television, means that a market for this type of company is extremely limited - currently non-existent, in fact.

If this is true in particular for the television channels, the peculiarity and prestige of Radio Radicale, although considerably reducing the field of potential purchasers or potential partners, could on the other hand lead to a much higher valuation than forother, more traditional national radio stations. The very small number of parties who may be interested in this offer renders extremely uncertain both the outcome of any negotiations and, even more so, any prediction regarding the sums involved and the time necessary for completion.

We are faced, therefore, with a difficult situation, complex and full of contradictions:

1) on the basis of the levels of indebtedness evident in the accounts and the financial analysis, and on the basis of the forecasts for the next financial year, the party must cease its activities and wind up;

2) Moreover, since both the party and the other companies have used up all available credit, further indebtedness on the part of the party would lead to bankruptcy, further indebtedness on the part of the other companies with the purpose of financing the party (whose lack of solvency is well-known), even only through loans, would involve illegal conduct on the part of the respective directors in terms of both civil and penal law, as well as causing irremediable damage to the financial health of the companies themselves.

3) Therefore only a certain, adequate and immediate financial contribution to the party could prevent its immediate closure.

There is, then, the hypothesis of the sale of Radio Radicale, which could contribute in a significant manner to the continuance of the activities of the party, but in terms and under conditions which cannot at present be foreseen.

These are the financial terms of the question.

If these are the terms of the problem then we must necessarily find other lines of attack to try to find a solution.

We have been aware for months, and when I say "we" I mean all the members of the party, of the situation, and of what we were coming up against. Why have we continued to operate without taking other, drastic measures to reduce expenditure, to cut down the party structure and to convert the political and organizational structure of the party itself?

The reply is simple and lies in the programmes we have carried out and the results we have obtained, even with our inadequate resources. It lies in our firm belief in the uniqueness of the Radical project and in the fact that such an opportunity for democrats all over the world will not be repeated in the near future.

The fact that the transnational party is the only instrument that can give democrats a real chance of finding hope once again is confirmed day after day. The clearest confirmation lies in the list of the defeats suffered daily by those who continue to work only through their now unusable national organizations: the ex-Yugoslavia, antiprohibitionism (particularly in the countries of Eastern Europe), the death penalty (particularly in the United States of America), the spread of nationalism, and the daily abdication of justice to violence and to Mafia organizations of all types. These are the areas for action that we have identified, but the list could go on. It is a list which demonstrates the dimension of the objectives that this party can legitimately aspire to, and also proves to us that more people must be enlisted to make use of the party and ensure its survival.

This is why, as is our duty, we present the Congress, which should be the Congress of foundation, with the problem of the survival of the party in such dramatic terms. And this is why we have continued until now to give life to the party, not hoping for a miracle in which, fortunately, we do not believe, but to see whether what is possible can also be realized.

It has not been realized so far. The first one thousand Italian members of 1993 have guaranteed one more month of life for the party, they have reduced the total financial requirement of 5 billion lire ($4 million) by 350 million lire ($285,000), but this is not the signal that the conditions have been achieved for the great leap necessary to reach the figure of 30,000 members needed to allow the party to exist.

Can this be realized at this Congress?

Do we have to close down?

These are the questions we must answer at this Congress.

Is this the usual threat made by the Radicals? Not at all. It can only be read as a threat by those who are forced to live with threats day after day. On our part there is only an awareness that we have done our utmost to try to hand over the Radical project to the party which will be formed, if the Congress decides that it is possible, for 1993 too.