Silvio's Lucky Charm

At his year-end press conference last month, Silvio Berlusconi was as ebullient as ever. The Italian Prime Minister predicted that after a "year of transition," 2005 would usher in the country's long-awaited economic turnaround. He was so confident, in fact, that you'd never know he'd just survived a year of crisis. Last June, with the economy sagging, voters gave him a bloody nose in European elections — his Forza Italia party collected just 21% of the vote. Soon after, Marco Follini, the wily Christian Democratic leader, threatened to withdraw his party from Berlusconi's coalition. Economy Minister Giulio Tremonti's forced resignation in July fired the hopes of opposition leaders even more. The bluster and bravado that had helped keep Berlusconi in office for longer than any other Italian premier since World War II seemed to be wearing thin

Yet six months later, the Italian leader is once again sitting pretty. What's his secret? Part of the credit goes to a new, gentler governing approach, as Berlusconi has tempered his outbursts against center-left opponents and found new ways to share power with coalition allies. And part goes to a dapper 69-year-old named Gianni Letta, who has been the engine driving Berlusconi's slow evolution to a more astute political animal. Letta was a key broker of last month's make-or-break deal that saw Follini retract his threat and become Deputy Prime Minister. "Perhaps Letta was not the one who convinced Follini, but who reassured him, who told him, 'Leave it to me. You'll be covered,'" says one insider. "Even when Follini and Berlusconi were no longer talking, communications were always open with Letta."

Letta has an official Cabinet title: Undersecretary to the Prime Minister with Oversight on Intelligence Operations. But he is much more than that. The former newspaper editor is Berlusconi's sounding board and strategist, helping the Milanese media mogul navigate Rome's innermost circles of influence. Their partnership dates back to the mid-1980s when Berlusconi hired Letta — already a Christian Democratic power broker — as the point man in Rome for his Fininvest holding corporation. During Berlusconi's eight-month stint as Prime Minister in 1994, Letta joined his political staff but not his Forza Italia. Today, Letta remains aloof from party politics.

One senior Italian diplomat who has known Letta since the 1970s calls him "a perfect example of soft power." He brings a velvet touch to a government known for pugilism. Enzo Carra, an opposition Parliament member who worked under Letta in the 1970s at the Rome daily Il Tempo, says he is universally respected for his gentilezza and his ability to feel the pulse of Italy's moderate conservative heartland. "Letta is the man who keeps all channels open," says Carra. "He is the dove of the Berlusconi administration, but for the opposition he is probably more troublesome than the hawks."

Outside his ornate office at Palazzo Chigi, the Prime Minister's headquarters, Letta flashes his Cheshire cat smile at TIME's request for an interview, citing a long-held decision to never speak publicly about policy: "I prefer to work back in the kitchen," he says. "There's no need to come out to the dining room." Still, Letta is not publicity-shy; he agreed to be photographed, and during breaks in the photo shoot, he displays his knack for cordial conversation without ever breaking his no-comment vow.