Silvio Berlusconi’s demise is imminent. It might happen tomorrow when the Chamber votes on last year’s budget statement. It might happen the day after tomorrow if the opposition tables a motion of no confidence. It might happen next week when the Senate votes on the reform package that the government put to the European institutions last week. Or he might just be able to drag it out until January.
But when it happens, then the real work will begin to put Italy and indirectly the euro back on track. And how it happens will condition the recovery.
The immediate question is when and how he leaves Palazzo Chigi; certainly there is no lack of pressure to get him out. The opposition had been screaming for months, but that is normal; the European institutions plus Merkel and Sarkozy have been making strong hints since August; his natural allies, the Church and the employers’ federation, the Confindustria have been explicit in their distaste for his person and policy for many weeks. But over the last week or so, an increasing number of party loyalists have been saying that he ought to “step aside” for the good of the party and the country.
The old Christian Democrat stalwart, Beppe Pisanu has said it explicitly for weeks and over the weekend, Berlusconi’s two most faithful followers have added their voices; Angelino Alfano, former minister of justice and now anointed successor and Gianni Letta, Berlusconi’s longterm eminence grise and fixer have tried to persuade him that it would be better to go willingly and have some control on what follows than be pushed ignominiously.
Today, at least, Berlusconi did not get the message – the night and grey light of dawn might make him change his mind.
In the meantime, the markets made their opinion abundantly clear. The spread on Monday morning between German and Italian bonds went up to its 491 points, the highest since the euro was introduced. Long term borrowing rates went up to 6.67% perilously close to 7% which is where Ireland, Portugal and Greece got into trouble. Both indices dropped mid-morning when there was a rumour that he was about to resign and then went up again when the rumour was denied. According to one calculation Berlusconi’s resignation would apparently mean a drop of 100 points in the spread.
Significantly the resignation rumours came from two Berlusconi faithfuls, the court jester Giuliano Ferrara in one of the family papers and Francesco Bechis deputy editor of Libero another centre-right paper. Berlusconi denied it using old-fashioned news agency wires but also Facebook.
He spent much of the day with his children and closest business associate, Fedele Confaloniere, presumably working out damage control action for the family’s Fininvest holdings, a good and possibly final example of Berlusconi’s priorities. The euro is at risk through Italian inaction, but the Italian prime minister is looking after family interests.
Over the weekend, Roberto Maroni, minister of the Interior and potential leader of the Northern League admitted that the coalition no longer had a majority but like other government supporters said that the only answer is early elections on the grounds that “the sovereign people” had chosen Berlusconi’s coalition in 2008 so they should choose a possible substitution – immediately.
The constitution, though, gives the prerogative to the President, hence Napolitano’s consultations over the last week to sound out possible alternatives.
If tomorrow’s vote does not pass, then Berlusconi will have to tender his resignation. If it passes without an absolute majority, then the opposition have promised that they will table an motion of no confidence which is likely to pass. Again, resignation. If enough waverers have been convinced by Berlusconi over the night, then the whole performance will be repeated next week when the European package will be voted on.
When it happens, Napolitano will have (at the moment), three choices. The first is a Letta-led government. This would mean continuity as Letta is Berlusconi’s man but it would almost certainly exclude the main opposition party, the PD which has said they will not support Letta. There is some talk of Giuliano Amato, the Socialist leader who took over from a discredited Bettino Craxi in 1991 and introduced swingeing taxes once before. The other possible leader is Mario Monti, former European commissioner, well-respected on the left and the right, in Milan, Rome, Berlin, Paris and Brussels. If takes the job and can put together a team capable of implementing equitable austerity measures and a growth package, then there is hope for Italy and the euro. But it is a tall order
I was asked for an assessment of possible “social unrest if the new government were to put through draconian reforms”. That problem will be high on Monti’s or whoever does get the job, list of risks. There are two reasons for optimism – despite the relative decline over the last decade, Italy is still a wealthy country with savings which can and are already being drawn upon. It also has one of the biggest grey economies in the EU, one which works in areas that Draco does not reach.
So it is unlikely that there will be widespread unrest like in Greece or in Italy in 1968-69 or 1977. With the double underpinning of a revolutionary left wing ideology and mass protests, it is also unlikely that we’ll see widespread terrorist violence as in the ‘70s and early ‘80s.
Still, Italy has a long history of political violence, it is part of the language of politics in the whole of united Italy. It only takes a few hundred well-organised activists as we saw last month, to set Rome ablaze and there are still a few Red Brigade diehards, exiles from a different era, still prepared to murder. And there is genuine hardship with increasing levels of poverty and discontent so Italy next revolution, the one that is just beginning, will not be completely velvet.
But before anything happens, there must be the change of the man on the throne… the substance will follow.
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