Berlusconi hosts G8 as scandals weaken credibility

* Italian president seeks G8 summit "truce"

* Berlusconi's support slips, but still high amid scandals



By Stephen Brown

ROME, June 30 (Reuters) - Next week's G8 summit in Italy may briefly take the spotlight off the personal scandals dogging Prime Minister Silvio Berlusconi, but will also put to the test his claims of leadership on the world stage.

President Giorgio Napolitano has asked Italian politicians for a "truce" during the Group of Eight summit on July 8-10 to avoid harming Italy's performance in such a high-profile event.

Berlusconi, whose guests include U.S. President Barack Obama attending his first G8 summit, has plunged himself into diplomacy to try to shake off the relentless talk at home about his divorce, womanising and hedonistic parties.

Italy is also keen for the meeting in L'Aquila to erase the memories of the violence that marred its last G8 summit in Genoa in 2001, in Berlusconi's second term, and to help survivors of the April earthquake in the town that killed nearly 300 people.

Giampiero Massolo, the Italian diplomat preparing the meeting, calls it a summit of "sobriety and solidarity", where leaders will stay in a police barracks rather than luxury hotels and be invited to see the quake damage for themselves.

But "sobriety" is not a quality much associated with Italy's premier, especially after revelations that escorts were paid to attend parties at his homes and that his wife filed for divorce over his eye for aspiring young models and women politicians.



"SUBVERSION"

Berlusconi accuses a hostile media and courts of "subversion", mindful that his first government eventually collapsed in 1994 after a newspaper published court documents just as he hosted an international security summit in Naples.

The scandals seem to have sapped some of the 72-year-old premier's unusually high approval ratings and self-confidence.

While never short on bombast -- proclaiming his government the "strongest and most stable in the whole Western world" on Monday -- Berlusconi says his support in his own private polls is now 62 percent, compared to 75 percent just over a month ago.

One newspaper poll this weekend had his support slipping to 49 percent from 51 percent, with the biggest drop among women, youngsters and practising Roman Catholics -- some of the people most likely to disapprove of sexism and philandering.

Despite approval ratings that are high by most standards, and solid victories in recent European and local elections, aides find themselves tackling talk of a "lame-duck" leader, when only a year ago he was returning to power with a resounding defeat of the centre-left.

"We know the prime minister has the support of the Italians and is therefore no 'lame-duck' leader and completely ready to lead the G8," Foreign Minister Franco Frattini told Reuters.



LEADERSHIP TEST

But it is questionable what level of leadership Italy or Berlusconi have on the main issues on the agenda in L'Aquila -- the financial crisis, climate change and development.

Sandwiched between G20 summits in London and Pittsburgh, L'Aquila was never likely to produce more than worthy statements on the financial crisis. On climate change, Obama has dictated the agenda rather than Berlusconi. On development, Italy has arguably the worst reputation in the G8 for meeting commitments.

The Catholic charity Caritas International accuses Italy of slashing aid to poor countries by 56 percent this year, saying: "This is not a good sign for the G8 summit in Italy."

Berlusconi himself says he plays a prominent role in world diplomacy, having helped to resolve the Georgian war, negotiate a new NATO-Russia deal and, on climate change, stop what he called a "quixotic" EU initiative last year.

But his reputation is defined more by his diplomatic gaffes, his relationship with Obama not helped by comments on the president's "suntan" or being quoted calling him "weak" on Iran.

Berlusconi has his admirers, including Russia's Vladimir Putin, Turkey's Tayyip Erdogan and Israel's Benjamin Netanyahu, who says Berlusconi stands up for "the truth and for decency".

One aid body hoping achievements outweigh the gaffes at the G8 is Action Aid Italy, where Luca de Fraia told Reuters: "It's obvious the rumours about Berlusconi's behaviour are possibly damaging what Italy is doing. There is a credibility issue."

"But Italy is still a big country and we need great initiatives from Berlusconi. (Additional reporting by Phil Stewart; Editing by Kevin Liffey)