“I’m Still Here!” – Berlusconi

• December 29th, 2011
• Posted by EUEditor

Silvio Berlusconi, the mercurial former Italian Prime Minister, forced from office under gathering clouds of scandal in mid-November, says he is “still on track”, not out of the political game.

His successor, Mario Monti, once a European Commissioner, more in the centre of politics, has adopted a technocratic style.

There’s been no sign of the high jinks that have landed Mr Berlusconi in court, fighting charges of financial improprieties, and improprieties with a prostitute trading as Ruby the Heart-stopper.

To outside observers, the break in Italian politics looked to be suitable for the serious task of tackling the country’s massive problems with public debt.

Concern remains, however, that economic growth, now low, will fall away, creating a recession, and so, creating public despair and disillusionment, and perhaps a revival of electoral support for that hero of times past – Silvio Berlusconi.

At 75, he has been telling Italian media outlets, a good percentage of which he owns, that he thinks a come-back is a good possibility, no matter how many people were jubilant and relieved to see him go.

Informed opinion agrees on one aspect of the scenario at least; the tenuous state of the economy and finance system, and the Monti plan for keeping it afloat.

From the Financial Times in London:

“A casual glance would suggest the break has been profound… The government’s approval ratings reflect the changing mood. More than half the population has faith in a man it has never voted for. This is more surprising given what Mr Monti has done so far. His salva-Italia package comprised tax rises and spending cuts worth €34-billion (A$43.59-billion; xe.com, 29.12.11). About €20-billion (A$25.64-billion) will be used to cut the country’s fiscal deficit in spite of rampant interest rates …

It would be a mistake, however, to be too cheerful over events in Rome. Mr Monti’s approval ratings fell substantially after his plan for fiscal tightening was unveiled… These trends risk becoming stronger in the new year. A deep recession will hit. The government believes that gross domestic product will fall by 0.5 per cent, but a range of independent estimates show that the contraction could be three or four times bigger…”

From the Editorial Board of the Washington Post:

“The Post’s View: The world economy’s future may hinge on Europe’s ability to resolve its debt crisis. And Europe probably won’t be able to resolve its crisis unless Italy gets its financial house in order. With a gross domestic product of US$1.7-trillion (A$1.68-thousand-billion) and a national debt of US$2.6-trillion (A$2.57-trillion), Italy is both dangerously close to insolvency and too big for the rest of Europe to bail out. The bond markets are charging Italy unsustainably high interest rates, and that won’t change unless and until the country can start shrinking its debt-to-GDP ratio.”

See EUAustralia Online, “Europe, Debt: 2012”, 27.12.11; “Italy’s bunga-bunga man goes bung”, 14.11.11.

Reference

Washington Port (Editorial Board), Washington, “Italy’s uphill financial fight”, 27.12.11. http://www.washingtonpost.com/opinions/italys-uphill-financial-fight/2011/12/23/gIQAJhETJP_story.html, (29.12.11).

Ferdinando Giugliano, “Monti needs more than Europe’s cheers to hold Rome”, Financial Times, London, 28.12.11. http://www.ft.com/intl/cms/s/0/b46cf1d8-2c9b-11e1-8cca-00144feabdc0.html#axzz1hsqnX4T0, (29.12.11).

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