by Francesca Di Meglio

FEBRUARY 6, 2005 - This wasn't the best week for Italy. For starters, practically the whole country is suffering from the flu including the Pope and Prime Minister Silvio Berlusconi. And their timing couldn't be worse. Italy - and frankly the world - needs such leaders to be fit and in form right now. Two headlines, in particular, are making it hard for Italians to sleep at night. Here's what's happening:

Italian Journalist Kidnapped
Giuliana Sgrena, a 56-year-old reporter for the leftist daily Il Manifesto, was departing from a mosque at Baghdad University on Feb. 4 when a group of gunmen pulled her out of the car and abducted her. Nearby guards opened fire, probably preventing others from getting kidnapped as well. Sgrena, on her mobile phone, called fellow journalist Barbara Schiavulli, who works for Italy's GRT Radio, at the time of her abduction. Schiavulli reported that she heard gunshots and screamed for her friend but got no response. Sgrena reportedly dialed Schiavulli's number again on Saturday for a brief call in which she did not speak. Schiavulli is working with the authorities to try and locate her colleague.

A group calling itself the Islamic Jihad Organization posted an Internet message requesting the Italian government pull its 3,000 troops from Iraq within 72 hours, presumably in exchange for Sgrena's safe return home. But this same group claimed to have killed two Italian aid workers, who were later released by other kidnappers. Sgrena is the second Italian journalist and the eighth Italian national to get abducted in Iraq.

Back in Italy, Berlusconi says negotiations are underway and the government is doing its best to help Sgrena. Il Manifesto hung a sign in a Roman square requesting her captors free her, and they shipped a video to the Al-Jazeera news outlet explaining the newspaper's staunch stance against the U.S.-led war in Iraq.

Ailing Italian Automaker Loses Hope
Fiat, once the king of Italian roads, is fighting for survival. Here's the deal: U.S. auto maker General Motors had agreed to buy Fiat Auto before it was facing a financial crisis (read: mounds of debt). Now, GM argues that it doesn't have to buy the Italian auto maker because Fiat's debt changes the terms of the deal. The dispute could lead to a drawn-out legal battle. The irony? The banks agreed to give Fiat a 3 billion euro loan in 2002 because of the previous agreement to have GM buy Fiat Auto by 2010, according to Reuters.

Both companies have a vested interest in coming up with some sort of accord because of joint ventures in purchasing and power trains that are saving them money. Word on the street is that GM and Fiat are continuing talks even if the formal negotiation time has ended. Rumors were floating that the Italian government would help Fiat Auto overcome its debt. But Italian Economy Minister Domenico Siniscalco issued a statement that the government is watching the auto sector closely but will not interfere with the GM-Fiat talks. Fiat unions are planning strikes to protest the company's uncertain future. In the end, GM could end up paying as much as $2 to $2.6 billion to get out of the original deal. And that's a lot of soldi!