THE CONSTANT PROVISION OF INFORMATION ON THE ECONOMIC SITUATION OF THE PARTY
Three years have passed since the XXXV Congress, three years in which the statutory rule concerning the annual convocation of the Congress has been suspended, but in which we have not interrupted the practice - that we have always followed - of providing constant information on the financial situation of the Party: regular and comprehensive documentation has been produced and provided on this subject, both at the meetings of the Federal Council and at the Italian Congresses.
Even in a regime of "extraordinary legality", such as that of the last few years, we have therefore guaranteed this distinctive characteristic of the Party, which has distinguished us and continues to distinguish us from all other parties.
For us, knowledge of the financial situation of the Party is a necessary precondition for the development of decisions on every political project.
THE APPROVAL IN ZAGREB OF THE ACCOUNTS RELATIVE
TO THE PERIOD 1/1/1990 - 30/9/1991
At the meeting of the Federal Council in Zagreb, the accounts relative to the period running from 1 January 1990 to 30 September 1991 were approved. The accounts of the previous period, from April 1989, from the Budapest Congress to the end of the year, were approved by the Federal Council in January 1990 on the occasion of the assumption of "full congreeional powers" by the First Secretary, the Treasurer, and the Presidents of the Party and of the Federal Council.
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Note: the accounts and balance sheets of the Radical Party are calculated in Italian Lira. The equivalent amount in US Dollars is given without wishing tocreate any precedent. The rate of exchange adopted is the average rate for 1991 (1,000 It. Lira = 0.806 US Dollars).
THE DOCUMENTATION PRESENTED TO THE CONGRESS
As well as the updates which complete the accounts for the 1991 financial year, this report to the Congress presents a series of tables which allow an analysis of the financial development of the Party for the entire 1990-1991 period, and also some of the most significant budget items relative to the first six months of 1992.
You also have at your disposal the reports presented during the course of 1991 (to the Federal Council, in September in Rome and in November in Zagreb). These two reports, together with that presented to the Italian Congress in February 1991, provide a complete picture of the financial situation of the Party, and allow evaluation of the relationship which has emerged between the implementation of political projects and the capacity for expenditure at our disposal during the course of this year.
THE ESSENTIAL PHASES OF THE LAST TWO YEARS.
THE "RE-BALANCING OF THE BOOKS".
Taken together, these reports describe the esential phases of the last two years.
The first phase was the re-balancing of Party accounts during the course of 1990, achieved thanks to the suspension of all activities, the annulment of the structure, and the positive solution of the financial crisis of the "Production Center": this solution ensured the solvency of this company, the owner of "Radio Radicale", which had considerable debts with the Party.
These measures allowed us to achieve the objective of balancing the Party accounts, which at the end of 1989 showed a deficit of around three billion lire.
THE UNREPEATABLE FINANCIAL CIRCUMSTANCES AT THE BEGINNING OF 1991
The second phase began, on the strength of these results, at the beginning of 1991: the extraordinary - and unrepeatable, it was said at the time - financial circumstances which, after the threat of bankruptcy had been allayed, made a figure of almost 7 billion lire (5,600,000 US dollars) available for direct use in political initiatives and activities and for spending on structures and services.
The estimate of total expenditure for 1991 was just under 7.5 billion lire (6 million US dollars).
A total of 1.3 billion lire (1,050,000 US dollars) was estimated for "expenditure on structures" - the Congress, two meetings of the Federal Council, and the Italian Congress.
A total of 650 million lire (525,000 US dollars) was estimated for political initiatives and activities in countries other than Italy - including the cost of running the offices in Budapest, Moscow, and Prague. A total of 200 million lire (160,000 dollars) was estimated for political initiative in Italy.
As regards services, a total expenditure of 2 billion lire (1,600,000 US dollars) was estimated for the running of the Rome offices, for staffing, and for Agorà, the Party's telematic centre.
The "Radio and Television News Watchdog", which ensures control in Italy over the political news broadcast by radio and TV channels, both public and private, involved an expenditure of about 250 million lire (200,000 US dollars), covered entirely by the sale of its services to outside bodies.
THE FINANCIAL RESOURCES AT THE DISPOSAL OF THE "POLITICAL PROJECT"
3 billion lire (2,400,000 US dollars) were destined to the realization of the "political project", for the publication of the newspaper "The New Party" (the detailed analysis of the estimated expenditure is to be found in the report attached to the budget presented to the Federal Council in September 1991).
In the fifteen months since February 1991, when the "project" and the estimate were presented to members and - in greater detail - to all the members of the Federal Council, all the phases planned at the time have been implemented.
However, instead of ten months, it has taken fourteen months. Although not sufficient to provide all the indications necessary for a full evaluation of the political result, this period provides a precise and exhaustive demonstration of the scale of the financial burden sustained to initiate this task and, more worryingly, of the burden to be sustained for its further development.
The delay in the implementation of the project, fully illustrated and explained in the reports presented to the Federal Council last year, is to be attributed above all to the technical and organizational difficulties for the realization of the newspaper. The distribution of the first issue was completed in September rather than March, as had been planned.
Consequently, we were only able to proceed to the evaluation of the response from November onwards.
Now, four months into 1992, with this Congress, the programme presented in February 1991 can be considered to have been completed.
FINAL EXPENDITURE
In the final accounts, the estimates of expenditure for the realization of the newspaper are confirmed.
Six issues of the newspaper have been published, together with three special issues of "Radical Newsletter" and a letter on the occasion of the delay in delivery of the fifth issue of the newspaper. These were sent to the same addressees as the newpaper. The total expenditure amounted to 2.8 billion lire (2,250,000 US dollars), instead of the 3 billion lire (2,400,000 US dollars) estimated.
With the convocation of the IV Italian Congress, two sessions of the Federal Council, and this Congress, the expenditure estimated for structures is also confirmed, as is that of activities, both in Italy and in other countries.
The most significant variations are to be attributed to the higher costs sustained for the functioning of the Party and services, due to the prolongation by four months of the period planned for the realization of the programme. The increase - after detracting the fixed costs that can be attributed to the realization of the project for the duration of the same period - amounts to 700 million lire (560,000 dollars).
We have also had to face an expenditure which it was impossible to foresee at the beginning of this year, due to the Party's initiative in the "referendum campaign": the promotion and the collection of 1,800,000 signatures in Italy for the two abrogative referendums, the first on the law on state financing for political parties and the second on some of the articles of the probitionist-inspired drugs law currently in force, and for the popular bill for the introduction of a single-seat electoral system, and the collection of 2.5 million signatures on the other seven referendums (three on the electoral laws, three against state bureaucracies and the occupation of public institutions by the political parties, and one on the environment).
This initiative has involved costs of 800 million lire (644,000 US dollars). Of this, almost 200 million (160,000 US dollars) were covered by contributions made at the signature-collection desks. We have not been able to obtain the reimbursement of a further 300 million lire (240,000 US dollars) from the other referendum-promoting committees, as had been agreed. The cost to the Party therefore amounts to around 600 million lire (480,000 US dollars).
These financial accounts should also take into consideration movements relating to fixed assets. In the overall framwork of resources, this item can bring about an increase in the value of properties, as in our case, but in financial terms it involves expenditure and the reduction of the funds available.
Expenditure in this respect amounts to about one billion lire (800,000 US dollars), comprising the completion of the Rome offices, with the modernization, the furnishing and the equipment of the second-floor premises in the same building. These new premises, used mainly by "Agorà" and by the "Membership Office", have turned out to be essential for the realization of the "project", in particular for the completion and the extension of the data base for the management of address lists and correspondence with members and with the addressees of the newspaper.
This expenditure also includes the purchase of the equipment for TV and radio broadcasting and filming directly from the Party offices.
INCOME
The most worrying aspect is that of income, which were about 1.1 billion lire (890,000 US dollars) under the estimate for 1991: 800 million (640,000 US dollars) less for self-financing and 300 million (240,000 US dollars) less for the collection of unpaid debts from the previous year.
THE REDUCTION IN THE RESOURCES AVAILABLE
As a result, the total financial resources at our disposal in 1991 were 5.95 billion lire (4,800,000 US dollars), compared to the figure of 7 billion lire (5,650,000 US dollars) estimated.
WE HAVE USED MUCH OF THE RESOURCES ESTIMATED FOR 1992
In the sixteen months under consideration in this report, we have faced a total expenditure of 9.3 billion lire (7,500,000 US dollars) and have used much of the resources estimated for 1991 to make up the difference.
THE CONTRIBUTION OF STATE FINANCING WILL BE LOST IN 1992.
THE FINANCIAL RESOURCES OF THE PARTY.
With the general elections in Italy and the fact that the Party is no longer represented in the institutions, we face the loss of the income which is due, in Italy, to parties represented in Parliament. The direct contribution to the Party (2.85 billion lire - 2,300,000 US dollars) will be lost from 1993 onwards, but from April of this year we can no longer count on the quota of salaries that elected representatives paid into the Party, and that amounted in the first four months of the year alone to slightly over 300 million lire (240,000 US dollars).
Considering also the income from the sale of the services of the "Radio and Television News Watchdog" and of "Agorà", of the radio and television sector, and the contribution of self-financing in the first four months, the income of the Party for 1992 amounts to a total of 4.65 billion lire (3,750,000 US dollars). The total financial resources available for the entire period from January 1991 to April 1992 therefore amounts to 10.6 billion lire (8,550,000 US dollars).
AN ACTIVE BALANCE OF ONLY 800 MILLION LIRE (650,000 US DOLLARS)
Deducting the outgoings in the period (9.3 billion lire - 7,500,000 US dollars) and taking account of the deficit on 31.12.90 of 500 million lire (400,000 US dollars), the accounts on 30 April show an active balance of only 800 million lire (650,000 US dollars).
Even if we do not take into account the sum which will become available in the next eight months from self-financing, this figure is barely suuficient for the completion of the activities already in progress.
The statement of accounts has so far not taken into consideration the value of property, that is the value of the Party offices and equipment, which are entered in the accounts of the Party and the company which owns the premises for a figure of 4.6 billion lire (3,700,000 US dollars), with a remaining mortgage of 680 million lire (550,000 US dollars). The market values, although difficult to estimate, can be considered to be at least twice this sum.
The situation, even though the financial resources available are similar to those of 1989, does not however, considering the property assets, carry the risks of bankruptcy that we had at that time to face and overcome, partly due to the risks deriving at that time from the dramatic situation of "Radio Radicale".
The existence of property assets should not, however, deceive us or create simplistic illusions, if we consider - as we must - that these assets (the offices, and the equipment, machines, and facilities contained in them) are essential to the carrying out of the Party's activities.
Recourse to bank credit on the strength of the value of our properties is also only possible if we have to finance projects and initiatives with respect to which we have a guarantee not only of costs, but also of the speed and the scale of returns. Otherwise there are great risks, principally that of setting off an uncontrolled and uncontrollable process of the compulsory winding-up of property assets.
The problem is, therefore, once again that of the Party, that of ensuring through the success of the "political project" that the Party can obtain the financial means which are necessary for its existence.
The financial requirement is relatively easy to calculate. Every month the resources necessary to guarantee the activity of the Party, as it is organized at present, both in the Rome headquarters and in the offices in other countries, amount to 250 million lire (200,000 US dollars). Each issue of the newspaper costs an average of about 300 million lire (240,000 US dollars). The distribution of a single "Radical Newsletter" to the same addressees as the newspaper costs about 85 million lire (70,000 US dollars). A meeting of the Federal Council, considering the increased costs caused by a growth in the number of members, costs around 300 million lire (240,000 US dollars), whilst the cost of a Congress lies between 700 million lire (560,000 US dollars) and 1.5 billion lire (1,200,000 US dollars) according to where it is held and the number of participants.
Even a programme of reduced activities until the end of the year, therefore, will require no less than a total of 4 billion lire (3,200,000 US dollars). Considering the resources available at the moment, the Party needs to find a further 3.2 billion lire (2,600,000 US dollars) to cover its financial requirement.
