Fiat in German peace drive

Mrs Schroeder-Koepf has not said whether she will accept the gift

The Italian carmaker, Fiat, is planning to give a new car to the wife of the German Chancellor as a peace offering to mend relations between the two countries.

Doris Schroeder-Koepf will receive the first Lancia Ypsilon model in Germany in September or October before its market release, a company spokesman said on Monday.

The gesture comes days after Italian Junior tourism minister Stefano Stefani provoked a diplomatic row by describing German tourists as arrogant, "hypernationalistic blondes".

Mr Stefani resigned on Friday after Chancellor Gerhard Schroeder cancelled his plans for an Italian summer break.

"We felt it was important to say that we do not agree with certain remarks that were made and to underline the friendship of the two countries," Fiat spokesman Vincenzo Luca said.

Mrs Schroeder-Kopf has not yet indicated whether she will accept the gift.

The car could raise $13,000 for charity

Relations between Italy and Germany took a turn for the worse earlier this month when Italian Prime Minister Silvio Berlusconi likened a heckling German European Parliament member to a Nazi concentration camp guard.

Mr Schroeder demanded an apology, and later said Mr Berlusconi had given one - though Mr Berlusconi himself denied it.

Fiat said Mrs Schroeder-Koepf could auction the car, valued at 11,500 euros ($13,000), and give the money to one of her favorite charities, an emergency helpline for children and teenagers.

In Germany's Bild newspaper on Sunday, Mr Stefani apologised for his comments - but seemed less contrite in the Italian Corriere della Sera.

"Germans will always be welcome in Italy because they are - and will remain - exemplary neighbours and reliable friends," he told Bild.

"I love Germany. If my words have caused misunderstandings among many Germans, I would like to apologise."

However, in Sunday's Corriere della Sera he was quoted as saying that if Mr Schroeder had been "funny, or even just intelligent" he would have not have taken offence.

He added that he didn't think other Germans would cancel trips to Italy.

"Only an imbecile would think such a thing," he told the Corriere. "I know the Germans well. They plan their vacations a year ahead, they are planners, fussy."