Italian Prime Minister Silvio Berlusconi ruined his debut as head of the European Union Wednesday when he stirred outrage by comparing a critical German lawmaker with a Nazi concentration camp guard.

Italian Prime Minister Silvio Berlusconi wipes his brow as he sits in the European Parliament in Strasbourg July 2, 2003. [Reuters]

Berlusconi's jibe, which he insisted was meant as an ironic joke, sparked fury in the European Parliament and embarrassed EU officials, overshadowing the presentation of Italy's priorities for its six-month EU presidency, which began Tuesday.

The outburst fueled the doubts of those who have questioned Berlusconi's suitability to lead the 15-nation bloc, given the conservative billionaire-turned-politician's legal problems and volatile character.

Opposition Italian MPs demanded that he resign, and even some of his political allies expressed dismay at his outburst.

Berlusconi later said he did not mean to offend German feelings, but he declined to retract the comment or apologize to Social Democratic MEP Martin Schulz.

The vice-president of the European Socialist group, British Labor MEP Gary Titley, said leaders of the political groups would meet Thursday afternoon to discuss what action to take if Berlusconi refused to apologize.

"If there's no apology...the presidents of the political groups will ask the president of the parliament to declare that we are officially in conflict with the council, which in essence means we don't cooperate with the council," Titley told BBC television.

But European Parliament spokesman David Harley denied that relations between the parliament and European Council, which groups national leaders, were on the brink of collapse. "That might be the position of one individual member of the European Parliament, but it does not have any validity," he told Reuters.

President Bush congratulated Berlusconi on taking over as EU president. A spokesman for the White House National Security Council said the US and Italian leaders would work together on US-EU issues.

KAPO

The flare-up came after Schulz criticized an alleged conflict of interest between the political role of Italy's richest man and his extensive media empire, and deplored outspoken comments on immigration by Reforms Minister Umberto Bossi.

"Mr Schulz, I know there is in Italy a man producing a film on the Nazi concentration camps. I would like to suggest you for the role of Kapo. You'd be perfect," Berlusconi exclaimed to jeers in the chamber.

Kapos were usually petty criminals, sometimes Jewish, used by Nazi German death camp authorities during World War II to enforce harsh discipline on Jews and other inmates.

Italian Prime Minister Silvio Berlusconi addresses the European Parliament in Strasbourg, July 2, 2003. [Reuters]

Berlusconi refused to withdraw the remark when given the opportunity by EU Parliament President Pat Cox and at a news conference. But he later told center-right EU parliamentarians he regretted his words had hurt the feelings of the Germans.

"I could not imagine that this would hurt the feelings of our friends the German people," he told reporters. "I am sorry, I am saddened that there has been a misinterpretation."

Cox called the incident highly regrettable and said the remarks "caused a sense of great offence among many MEPs."

UNACCEPTABLE

The German government called in the Italian ambassador in Berlin to tell him Berlusconi's comments were "unacceptable."

The Italian Foreign Ministry summoned the German ambassador late Wednesday and told him Schulz's remarks were "a grave, unacceptable offence" to Berlusconi's dignity and to the Italian and European institutions.

Berlusconi said Schulz had insulted him and his country. He interrupted Cox at a joint news conference by banging on the table imitating the manner in which some MEPs had barracked him.

The leaders of two of the four main parties in Italy's center-right coalition distanced themselves from Berlusconi's comments, and Greens leader Alfonso Pecoraro Scanio said "For the good of the nation, Berlusconi should apologize and resign."

The incident marred what began as a suave introduction to the Italian presidency, with a carefully crafted, silken speech pledging to revive a stagnant European economy and rid the EU of a "Hamlet syndrome" of self-doubt in world affairs.

Berlusconi vowed to give priority to boosting investment in pan-European transport and energy projects, research and development, and promote reform of member states' pensions and welfare systems to meet the challenges of an aging population.

The Italian leader, who had been on trial for allegedly bribing judges over a 1980s business deal, has just rushed a law through parliament granting himself and other top state officials immunity from prosecution while in office.

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