In response to a national proposal for small towns to merge with others, Filettino began putting together a bid to become a principality. 

The New York Times By ELISABETTA POVOLEDO, Published: August 29, 2011 

FILETTINO, Italy - When the Italian government announced in mid-August that it would force towns with fewer than 1,000 residents to merge with their neighbors as part of an emergency cost-cutting budget, there were strident protests across the country. 

Filettino's currency. 

Evoking the history of Italy, a nation forged from countless city-states protective of their local traditions, dialects and diversity, some of the mayors of the 1,963 towns affected by the measure turned in the honorary keys to their cities in protest. Others said they would welcome immigrants escaping war-torn Libya to push their populations over the 1,000-person threshold. 

The mayor of Filettino has loftier aspirations: He wants his town in the hills east of Rome ? population 598 ? to become an independent state under a monarch. 

?If that?s what it takes to keep the town autonomous and protect its natural resources,? said the mayor, Luca Sellari, who was elected in May. Besides, he added, ?It?s everyone?s dream to be a prince.? 

As befits a monarch, Mr. Sellari has lost little time in pursuing his dream. The would-be principality already has a coat of arms that now graces everything from T-shirts (?going like hotcakes,? Mr. Sellari said) to a liqueur, the Amaro of the Principality, which a local bartender, Maria Cerrocchi, said was just a brand-name bottle ?with a photocopied label stuck on it.? 

Filettino has even printed its own currency, the fiorito, which means ?flowered? (?like the town will flower in its new guise,? the mayor explained) and which harks back to the florin, the money first coined in 13th-century Florence. If fioritos become legal tender (so far they are just souvenirs), the exchange rate is supposed to be set at two to the euro, or about 72 cents apiece. 

?See, we?ve resolved the public debt issue,? said Enio Marfoli, who is Filettino?s part-time councilor for culture and a full-time oboist who plans to write the national anthem. Mr. Marfoli said he was already doing his part to help the Italian state trim administrative expenses: as councilor, he works for free. ?It?s basically volunteer work,? he said. 

Across Italy, small-town mayors are angry that the national government chose to cut money for their relatively negligible budgets rather than tackle big, politically sensitive issues like raising the country?s retirement age. 

?Do you know how much all the mayors and town councilors in small Italian towns cost the state?? asked Franca Biglio, president of the National Association of Small Towns, known as Anpci. The answer: 5.8 million euros, she said, about the same as what the lower house of Parliament ?pays for its restaurant services.? 

?We work like crazy, and they want to cut something that costs the same as their kitchen,? she said. ?What are they waiting for? A revolution to explode?? 

Rebellion was certainly in the air on Monday when hundreds of mayors from cities of all sizes protested in Milan against other measures included in the austerity budget. 

Ms. Biglio, who is also the mayor of Marsaglia, in Piedmont, was not appeased after the government announced on Monday, after a seven-hour summit meeting of the governing coalition, that the measure affecting small towns would be substituted. A note issued by Prime Minister Silvio Berlusconi?s office Monday evening said that small towns would have to unite to carry out ?fundamental functions? starting in 2013. 

?I guess it depends on what ?fundamental functions? means,? Ms. Biglio said. ?There is still a lot of confusion.? 

Monday?s meeting was called after one of Mr. Berlusconi?s allies, Umberto Bossi, leader of the Northern League party, openly expressed grave reservations about an austerity plan that he had voted in favor of not three weeks before. 

That $65 billion emergency budget was hastily adopted on Aug. 12 in an effort to calm the financial markets and to satisfy the European Central Bank, which was pressing Italy to speed up work on balancing its budget. 

The majority meeting spawned several modifications to the austerity plan that will be taken into consideration alongside other proposed budget amendments piling up for the Senate to address. The fact that many of the objections come from members of the governing majority itself is a sign of serious political difficulties for Mr. Berlusconi, whose increasingly fractious majority in Parliament is striving to make the austerity measures more palatable to voters. 

?Berlusconi wants to continue governing, but he can?t, that?s the problem,? said the opposition leader Pier Luigi Bersani of the Democratic Party. He noted that just a few days after the cabinet had unanimously approved the crisis measures, ?ministers each wanted to change the recipe.? 

?This is the political problem that we have in Italy,? Mr. Bersani said, one that undermines the government?s credibility. 

Tito Boeri, an economics professor at Bocconi University in Milan, said that ?the situation is one of high uncertainty, and we don?t really know where it?s going to go at the end of the day.? 

Italian business leaders have also voiced concerns. 

?The crisis isn?t over, and this calls for forceful, even unpopular, decisions,? Emma Marcegaglia, the president of an Italian industrial association, told reporters on Saturday. The political bartering was ?only making things worse,? she said. 

The Senate is scheduled to start examining the austerity budget package on Tuesday, and amendments are likely to change its focus and impact. On Monday, for example, the government announced that it had dropped a planned bonus tax on Italians earning more than 90,000 euros a year (though it would still apply for members of Parliament). 

But even if the measure to force the small-town mergers is watered down, Mr. Sellari, the would-be prince of Filettino, said he would go ahead with his monarchial plans. He was scheduled to meet Monday with one of Italy?s most famous lawyers to examine the legalities involved in secession ? constitutional details that he said he was certain could be overcome. 

"It's part of the principality's motto" he said. 

" 'Nec flector, nec frangor'  we won't bow or break when it comes to our plans."
 

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