Ciao Silvio: Italy Looks Beyond Mess Left by Berlusconi

By and Alexander Jung in Rome

Silvio Berlusconi dominated Italian politics for 17 years. Now he is gone. The political and economic mess he has left behind, say some, could pose a danger to the whole of Europe.

Photo Gallery: Italy Says Ciao to Silvio Berlusconi Photos
REUTERS

Silvio Berlusconi stepped down as Italy's prime minister on Saturday after having spent the last days of his rule surrounded by family members in his grandiose fortress in Arcore, just outside Milan. He wanted to discuss the details of his departure and divide his corporate legacy among his children. He has had a burial spot set up in the villa's park behind perfectly trimmed box hedges. It is a mausoleum of white marble with space for himself, la famiglia and hand-picked friends and supporters. He would appear to be prepared for his end. But is his country, too?

In the outside world, meanwhile, the rebels were rioting, and former party colleagues were turning their backs on him. He called them "traditori," traitors. During the decisive session of parliament, he wrote this word on a piece of paper. On its other side, he jotted down an "8" -- the number of votes he fell short by in his attempt to win an absolute majority.

Despite his defeat, Berlusconi still refuses to admit that he was the one who almost drove the country that he wanted to lead like a company into bankruptcy. His departure could awaken some sympathy in that it's reminiscent of the final days of Tunisia's Zine El Abidine Ben Ali and Libya's Moammar Gadhafi, the two dictators whose friendship he fostered so assiduously. In the end, things went very quickly for all three. During his final hours in power, Berlusconi was also completely detached from reality.

When facing his end, he even compared himself with a dictator when he quoted from a letter Benito Mussolini wrote to his mistress, Clara Petacci. In it, the "Duce" writes: "Can't you understand that I don't count for anything here anymore? I can only still give advice." Well, Berlusconi said, that's exactly how unloved he also feels now.

Who would have thought this was possible just a few weeks ago? Nothing could topple him -- not sex scandals, not trials. What ultimately did Berlusconi in was not the bed but the spread. Nervous stock markets had a hand in it, as did a Europe that showed itself to be initially amused but ultimately shocked at the sight of this clown at the southern end of the Continent. Italy's national debt now amounts to €1.9 trillion ($2.6 trillion), or a quarter of the debt of all euro-zone countries taken together.

"A Real Danger to Europe"

On Nov. 9, analysts at the investment bank Barclays Capital warned that Italy poses "a real danger to Europe and the world economy" and that the country might already find itself "beyond the point of no return."

The Berlusconi system has left its mark in many places across the country, particularly in the cement-filled landscapes of the south. Berlusconi was everywhere, and he still is. He ran the country down. He might have occasionally driven to the problem regions, but he never took a close look. He provided the country with the very thing that kept it ailing. He determined what the Italians saw on TV. He impeded and delayed reforms. He fueled the decline of political culture.

Berlusconi did not trip himself up, as may have been assumed. But what's currently happening in Rome's corridors of power is no salvation, even with his replacement as prime minister by Mario Monti, a former European Commissioner. Until new elections are held, the new government will be led by an economic specialist rather than by a politician from the old guard.

Indeed, it's the Greek model. Lucas Papademos, a former vice president of the European Central Bank and head of Greece's central bank, is now leading the interim unity government in Athens. These days, those with economic expertise are taking the helm and pushing aside the leading politicians who bear sole responsibility for their country's fatal loss of credibility.

In fact, it's actually a very typically Italian tragicomic moment to see the country searching for the type of savior that Berlusconi represented himself as 17 years ago: someone who can make a break from the established system; someone who boasts economic dynamism and who is in a position to push through reforms in record time with the support of the full spectrum of political parties.

Last week, Klaus Regling, the head of the European Financial Stability Facility (EFSF) bailout fund, warned that time was running out for Italy. "Italy has an enormous amount of work in front of it," Monti hastened to add. And European Commissioner for Economic and Monetary Affairs Olli Rehn had the figures recalculated and stated what everyone had been already suspecting: Despite all its pledges, the country would not be able to balance its budget until 2013.

Berlusconi Didn't Care Much about EU

Last Wednesday, interest rates on Italian sovereign bonds climbed above the psychologically important mark of 7 percent. Indeed, many economic experts believe that once a country has surpassed this mark, it can no longer free itself from its debt trap. In 2012, €300 billion in bonds will reach maturity. The Italian state will already have to make payments for almost half of that amount between February and April. If you do the math, that means more than €2 billion in securities on each and every trading day.

Berlusconi didn't care much about the European Union, Italy's debts, stagnating growth or downsizing the country's bloated bureaucracy. Even so, he remains convinced he was the best thing that could have happened to his country. Britain's Economist magazine wrote in the summer that Berlusconi always refused to recognize Italy's precarious situation in the total of nine years he served as prime minister. Whether it had to do with liberalizing the labor market or reforming pensions and professions, everything was pushed back in the minutiae of day-to-day politics, watered down and sacrificed to the political calculations of holding on to power.

Indeed, Berlusconi really only succeeded at one thing: By becoming a politician, he saved his corporate empire from ruin and kept himself out of prison. It was only in this way that he shielded himself for years from trials on charges related to tax evasion, false accounting and bribing judges.

Even these days, he is primarily concerned with his personal survival. At his family gatherings in Arcore, the primarily issue of concern has been salvaging the estimated €6 billion family fortune with his son Pier Silvio, the vice president of the Mediaset Group, and his daughter Marina, the president of Mondadori, Italy's largest publishing house. And to do so, it would now appear that Berlusconi wants to support the very cost-cutting measures that he has always blocked.

The president of his media company Mediaset reportedly warned him frantically last week: "We're nose-diving, Silvio. Our shares have lost 12 percent (of their value). You need to step down and accept a Monti-led government. Otherwise, you'll no longer be able to pass much down to your children."

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1. Can the leopard change its spots?
Eleos 11/15/2011
What the world hopes of Italy today is what the world has always hoped of Italy: that it will contradict its stereotype and say Ciao to corruption and cronyism. Some hope!
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