Thursday, November 10, 2011
For the oncologist, a cancer can be fascinating – for the patient, rather less. Studying Italian politics is truly enthralling, living it and facing the consequences leaves one a lot less enthralled. The moves and counter moves over the last few days have the allure of the Spassky-Fisher chess clash and are a lot more understandable to the non-initiated, but as a citizen facing the possible consequences of an Italian meltdown is a frightening prospect.
On Tuesday, Berlusconi was to have faced a no confidence vote if he failed to win an absolute majority in the budget ratification vote. In the event, he took 308 votes, eight less than the 316 necessary; “traitors” as he scribbled on his notepad. The next move should have been the opposition tabling a vote of no confidence to be voted on in the next few days. Instead, Berlusconi outmanoeuvred them by promising President Napolitano that he would resign… after the package promised to the EU had been passed. The bill is a complicated one and on Tuesday evening, no one was certain whether it would take a few days or a few weeks. Until then, Berlusconi was safe and in power as no one would table a no-confidence motion while the bill was being discussed. After that, he said he hoped there would be early elections though he allowed that it was the President’s prerogative to decide. He also hoped that the promise of his resignation would calm the markets. The subtext was that in the time before Christmas, Berlusconi might be able to salavage his majority as he had done exactly a year ago.
Instead, the markets went mad. The spread between German and Italian bonds had already reached a new record 495 on Tuesday after the budget vote. Yesterday it went up up to a devastating 570. Ten year Italian bonds were at 7.47%, well over the presumed danger mark of 7%. Berlusconi’s spokesmen try to spin this by saying since he has promised to resign, this shows that it is not his presence which caused the run on the Italian treasury bonds. In fact, though, the markets like the street in Rome, once again, didn’t believe him. He has made too many promises and one to resign without even a date on it, was not plausible. The idea that there might be elections with Angelino Alfano as Berlusconi’s successor also raised eyebrows of disbelief. Alfano would be an obvious front for Berlusconi so would mean absolute continuity.
Faced with turmoil in the markets, President Napolitano made his move. He issued a statement reiterating Berlusconi’s commitment to resign, locking him into that commitment, and saying that the European recovery measures would be passed “with days”, hinting that he wanted the bill on his desk before Sunday to avoid more confusion when the markets open on Monday. Most of the opposition figures said they would support the easy passage of the bill through both houses, at worst abstaining but not obstructing.
Napolitano’s final move was to appoint Mario Monti life senator, a move seen as a prelude to asking him to form a government. Berlusconi himself accepted the proposition of a future Monti government (though some are suggesting he might be finance minister in an Amato government).
It looked as if Berlusconi was on the defensive again, check if not yet check mate.
Monti is by far the best candidate to lead a technocrat government which is the only way out of Italy’s predicament. He is well-respected in Brussels and in the European capital both as an academic economist and a very able politician. As European commissioner for competition, he took on Microsoft and won. He was appointed by Berlusconi and confirmed by the centre-left D’Alema government in 1999 so cannot be called partisan.
Yesterday evening and this morning, it seemed as if it were a done deal with Monti presumably sounding people out for possible positions in a government which would begin early next week with a “huge job to do”.
Now, we are back to uncertainty with part of the PdL calling for elections and part accepting the Monti option. Antonio Di Pietro has said that he will not support Monti but his supporters are furious. Less surprising, the Northern League will not support the technocrat. This leaves the PD, the centrists, some of the left and some of the PdL supporting the government of national unity, far less than the big majority all party support that Monti or anyone else would demand before taking up the job.
No wonder the employers’ federation’s financial paper Il Sole 24 Ore has Fate Presto (Act Quickly) on its web page in huge characters.
The package promised by Berlusconi to the EU when passed, will be a start, but then there will be difficult times, more cuts and greater hardships, possible if the new prime minister can work with most of the parliament, employers and unions and above all show that public sector cuts mean cutting politicians’ privileges.
Tomorrow the bill goes to the Senate – that will be the test… or the next move towards a still distant endgame.