Dear comrades,

after having thus fulfilled the task of presenting and illustrating the final balance at 30 September 1991, we now wish to briefly provide a few elements which - taking into account also the more accurate and exhaustive information on the economic and assets situation available with the closing of the balance - provide an update on the trend of the current accounting period.

First of all, we must inform you that the concern we had expressed on the situation in the report of last September, are unfortunately fully confirmed today.

On that occasion, we had expressed serious doubts - with particular reference to revenue - on the possibility of maintaining the results foreseen in February until the end of the year. As far as revenue is concerned, such results amounted to overall L.7 billion.

Our greatest concern regarded the amounts of the "Self-financing" and of the "Parliamentary allowances".

As far as the former of these two items is concerned - which is included in the February estimation for an overall amount of L.1500 million - in September we had already introduced a correction, reducing the amount to L.900 million. On introducing this reduction - caused by a negative membership trend in Italy - we were in fact counting on the possibility of a recovery in the last months of the year, supported by an adequate promotional campaign. To date, it has been virtually impossible to launch this campaign owing to the ongoing activities.

Thus, the perduring of the negative membership trend objectively leads us to reduce this estimation by L.200 more million.

Also as far as the estimated revenue from the "parliamentary allowances" is concerned, for the reasons highlighted in the report, in September we had reduced the amount by L.200 million, bringing it from L.1225 million to L.1025 million. Those reasons still remain, and therefore it is inevitable to foresee a further reduction by L.125 million.

Moreover, the Parliamentary Group at the Chamber of Deputies has recently sent a communication regarding another item of the revenue, relative to the "Contribution of the Groups of representative of the Italian Parliament". In reply to our request to pay the remaining sum of the established amount to the Party, the parliamentary Group informed us of the impossibility of paying such sum, with arguments which it is useless to discuss now. In the event of a negative confirmation to our request, it will be necessary to reduce the estimated amount by L.150 million.

The overall reduction of the estimate of revenue, due to these items, would amount to almost L.500 million.

Lastly, the controls carried out at the closing of the balance at 30 September have highlighted the fact that if we adopted a more accurate and realistic evaluation of the actual possibility of achieving the result, the amount of the estimated revenue for "Contingent assets" and for "Services and television copyright of the Centro d'Ascolto" would, on the whole, need to be reduced by L.300 million approximately.

Thus, we are faced to a series of reductions which, at the end of the period, will bring the global revenue to a total amount which is inferior by about L.800 million. This reduced revenue, added to the negative difference foreseen in September, implies that the accounting period closes with an overall negative difference amounting to L.1300 million.

If we take into account the transfer of L.1000 million - stated in the September report - from the expenditure items in the assets side (owing to the investments which have been made but which had not been foreseen) and considering also the result of the balance (- L.500 million) as it was at the end of 1990, the estimation for the closing of the balance at 31-12-91 gives us a deficit ranging between L.700 and L.800 million.

This sum corresponds to the smaller revenue from self-financing; as we repeatedly underlined, this is the crucial point for a possible, probable new financial crisis, which - at the current state of affairs - could be irreversible.

Moreover, the additional L.500-600 million which - currently - cause the global financial shortage of L.1300 million, are almost entirely due to the smaller revenue of other "ordinary" items, such as those which the Groups and the elected representatives in Italy should give (L.325 and L.190 million respectively). It is worth drawing attention on the peculiarity - or the "uniqueness", as it was called then - of the party's situation at the beginning of 1991. The balance recovery achieved at the end of 1990 concerned chiefly the assets. The economic recovery - as we underlined with great clarity - was an achievement to be reached through self-financing. The balancing of the profit and loss account in 1991, therefore, remained an objective to be achieved through the contribution of a greater revenue, in parallel with the use of the allotted sums, but before their depletion.

The minimum technical requirement to guarantee these conditions necessary to ensure the party's survival was identified with the achievement of at least 50,000 members throughout the world.

The "political project" of 1991 - it is best to underline it - originates from this minimum, indispensable condition.

The means by which to start the achievement of the project has been - and is - the newspaper "The New Party".

In this perspective, the publication of the first issue had been scheduled for the end of February of this year.

The budget for the achievement of the project and the carrying out of the party's activities for 1991, developed at the end of January, took into account a membership trend which at the time was particularly favourable. This is proven by the fact that the revenue from self-financing was estimated to amount to L.1500 million (with a 70% increase compared to the previous year).

The six-month delay in the launching of the political project and in the dispatch of the newspaper's first issue - as we explained exhaustively in the report presented in September - has caused an accumulation of unproductive costs to the detriment of the estimated return in terms of memberships and self-financing, as a result of the political initiative entrusted to the "project".

It is not easy to estimate the damage caused in economic terms. We have already seen, with reference to the revenue only, that the diminutions which we should expect precisely from the ordinary items, directly or indirectly connected with the self-financing, correspond entirely to the predictable deficit. If we considered the damage strictly in terms of costs, considering that the ordinary expenditure, which has remained within the estimated limits, exceeds L.300 million monthly, we would have an amount, due to the six-month delay, which nears L.2 billion.

Therefore, it is a situation which objectively causes concern, though at the moment it can be kept under control. The danger of a process of irreversible crisis is, in fact, due to the possible extra expenses for the referendum campaign in Italy and to the expenses to be covered for the Congress. The latter, as we said, will in all likelihood amount to less than L.1 billion (at least L.300 million more than the estimated amount). Such danger will become increase as we near the expiry of the legislature and the renewal of parliament (currently scheduled to take place in six months' time).

The renewal of Parliament in Italy sets a deadline after which the structure of the party's revenue will in any case undergo a drastic change, and in proportions which cannot be estimated at the moment.

The only thing we can say now is that for 1992 the party will be able to count only on the share of public funds, which will be allotted by the end of January, for an amount of L.2850 million over an amount of L.400 million, due to 5 months of allowance shares from parliamentarians, and over no more than L.1.000 million from the broadcasting sector, for a total amount of L.4.250 million. Once the L.800 million deficit scheduled for the end of 1991 is absorbed, as well as the extra expenses for the congress, amounting to L.300 million, and an expense for the referendum campaign which we can approximately establish to be L.500 million, the sum which will be actually available for 1992 is - at the current state - approximately L.2.650 million, corresponding to less than 40% of the estimated expenditure for 1991, with a balance corresponding to the minimum estimation in relation to memberships and self-financing. The sum amounts to almost L.4.500 million, corresponding to 22,000 Italian members.