Rome - To understand the challenges facing Italian Prime Minister Silvio Berlusconi in 2009, it's best to consider the country's distinctive boot shape and its reputation for quality footwear.

Like a person putting on a fine boot, Berlusconi only has to pull hard enough on the boot straps to ensure a snug fit. But, should he pull too hard, he risks splitting the seams and pushing his toes through the fabric.

Similarly, Berlusconi, flush from his victory in April's elections, ends 2008 on a high note, with approval ratings around 60 per cent. But maintaining those figures into 2009 will require applying just the right amount of pressure in just the right place.

As things stand, little seems to threaten the 72-year-old premier's chances of seeing out his full term in 2013.

"After that he will aim at becoming president of the republic," predicts political scientist James Walston, referring to the largely ceremonial position of head of state, which nevertheless is still covered by immunity from prosecution.

But that could change if Italians start holding Berlusconi responsible for the country's economic straits. The eurozone's third largest economy has long had a stagnant economy. It slid into recession in November.

Italy also placed 40th out of 82 in a table measuring global competitiveness, drawn up by the Economist Intelligence Unit. In Europe, only Greece and Turkey scored worse.

However, Italy was spared some of the worst effects of the global credit crunch, mainly because its conservative banking sector has been largely untouched by the subprime crisis.

Yet the country's economic woes are deep-rooted and require, most analysts agree, structural reforms including greater job market deregulation, slashes to the large public sector and a substantial investment in research and development.

In past election campaigns, Berlusconi tackled these issues head- on, unveiling ambitious plans. Later, he would blame coalition partners, labour unions and the "communist" opposition for hampering attempts to implement the promised reforms during his two previous stints as premier.

In contrast, for the 2008 elections, no widescale reform plans were touted by Berlusconi. Instead he focused on what surveys suggested were the most pressing concerns Italians felt were facing them. Those included petty crime, especially that linked to illegal immigration, and a rubbish removal crisis in Naples.

He also made his own a campaign to keep bankrupt flagship carrier Alitalia Italian-owned.

Many of those goals have since been accomplished. Berlusconi has claimed credit for cleaning up Naples, something the previous centre- left government failed to do. Also, hundreds of troops have been deployed alongside police in cities to combat crime, while a consortium of Italian private investors is poised to purchase the state's controlling stake in Alitalia.

But critics say these measures are mostly cosmetic, if not misleading.

"Putting soldiers on the streets doesn't help deal with the political corruption linked to the mafia," Walston, a professor at the American University in Rome, told Deutsche Presse-Agentur dpa.

Organized crime is said to represent Italy's largest economic sector.

Also, while rubbish may no longer pile up on the streets of Naples, it is being expensively transported abroad, or to other Italian regions - an unsustainable practice in the long run. The Berlusconi government is no nearer to introducing environment- friendly, rubbish-sorting measures, than the centre-left ever was.

And, while Berlusconi successfully blocked attempts at a foreign takeover of Alitalia, his alternate proposal leaves Italian taxpayers set to foot the bill of a buyout plan that mostly allows the private Italian consortium to gain the airline's assets without having to inherit its debts.

Widely welcome have been government efforts to clamp down on unjustified sick leave and other forms of absenteeism in the civil service.

Less popular, judging by the street protests and strikes they have prompted, are funding cuts to public universities and a reduction in the number of teachers in primary schools.

Still, Berlusconi has pressed on with these reforms, possibly encouraged by the favourable opinion poll ratings his government has won for its overall performance. It has helped that the opposition and labour unions are weakened by internal divisions.

Berlusconi's coalition, which holds a comfortable parliamentary majority, also lost no time passing immunity laws protecting the nation's top office-bearers, and hence Berlusconi himself, from being prosecuted while in power.

Berlusconi, who accuses "left-wing" elements of the judiciary of persecuting him, now says he can finally concentrate on the business of governing the country.

But the centre-right is not immune to infighting. As part of its election pact with Berlusconi's People of Freedom party, the Northern League party is demanding greater fiscal autonomy for its stronghold in the country's rich north.

This, in turn, would mean less revenue at the national level for redistribution to the poorer south, where the People of Freedom receives significant support. Handled incorrectly, the agreement could one day expose cracks in Berlusconi's support. (dpa)