The Sweet Poison of Berlusconi: Italy's Downward Spiral Accelerates
International financial markets have lost their faith in Italy and Italians have lost their faith in their leader. Prime Minister Silvio Berlusconi has led his country into the economic doldrums and the moral abyss. And he has shown no interest in solving any of the myriad problems which plague the country.
"Ah! servile Italy, grief's hostelry! / A ship without a pilot in great tempest! / No Lady thou of Provinces, but brothel!"
Dante Alighieri, "The Divine Comedy", Purgatorio: Canto VI
Monday, July 18, 2011 -- in the Milan Palace of Justice, a building protected by steel gates and blocks of marble, the next hearing in a trial got underway. It is the 16th trial against Italian Prime Minister Silvio Berlusconi since the early 1990s -- and by far the most spectacular. The proceedings are only now moving forward after delays due to questions about the court's jurisdiction and because the defendant was unable to attend because he was traveling on official business.
A 782-page dossier, numbered 5657/2011, was created in this Mussolini-era building near Milan's cathedral. It is filled with recordings of telephone conversations held by Berlusconi's party girls, their text messages, their diary entries and the transcripts of their police interrogations.
Berlusconi is said to have had sex with 33 women during private parties at his estates, such as the 145-room Villa San Martino in Arcore. One of those women was only 17, a nightclub dancer who uses the stage name Ruby Rubacuori. The indictment by the Fourth Chamber of the Milan Criminal Court includes charges of abuse of office and the promotion of underage prostitution.
The investigators have compiled several pieces of evidence that support the indictment, even though both the defendant and Rubacuori deny the charges. Nevertheless, recorded telephone conversations between Rubacuori and her friends suggest the opposite is true. In one of many examples, Rubacuori says: "He called me yesterday and said: Ruby, I'll give you as much money as you want. I'll pay you, I'll cover you with money, but it's important that you keep everything a secret. Say nothing -- to anyone."
Il Cavaliere -- a sinner caught in the act. Not just the Milan court, but all of Italy must once again confront the buffooneries of its aging prime minister -- and this at a time when the country is in economic difficulties serious enough to threaten its very survival, and when the future of Project Europe depends in part on whether the third-largest economic power in the euro zone is being run decently and with sound judgment.
But the world, as has recently become apparent, thinks that it is not. Berlusconi's Italy is debt-ridden, shouldering a burden worth 1.85 trillion, more than twice as much as Greece, Ireland and Portugal combined. In the next 12 months alone, 300 billion of that debt will have to be refinanced -- more than the 250 billion in the euro-zone bailout fund. Last week, confidence in the country seemed to be disappearing from one day to the next.
Rating agencies, led by Moody's, threatened to downgrade Italy's credit rating. Private investors panicked and sold their Italian investments, US hedge funds bet gigantic sums on the further decline of Italian government securities, and the Milan Stock Index declined for an entire week. It seemed as if Italy, the world's eighth-largest economy and a founding member of the European Union, had become the next Greece.
A Debt Spiral
The Finance Ministry in Rome easily managed to sell additional billions in debt securities last week, but it had to pay almost 25 percent higher interest than before. Had a new vicious cycle of debt been set in motion, this time on the western shore of the Adriatic?
This storm on Rome was also a trial of sorts. It was the international financial markets that were passing judgment on Italy last week. And this, too, was an indictment of the man at the top, Silvio Berlusconi.
The financial markets see the Italian premier as a burden on Italy and, by remaining in office, he is unsettling investors, writes the Financial Times. Some of Berlusconi's own supporters now fear that the prime minister and his scandals could irretrievably drive the country into a debt spiral. "Everyone is afraid of the contradictions between what Berlusconi needs for political survival and what the markets need," says columnist Francesco Sisci.
"Your government is harming Italy," opposition politician Anna Finocchiaro told the premier last Thursday. "This great country would be much better off without you."
Hardly anyone in the capitals across the EU believes that Berlusconi will remain in office until the end of the current legislative period, which ends in the spring of 2013. It is thus time to take stock of the damage done in an era now drawing to a close.
Unending Debt Burden
In the 150th year of its existence, the Repubblica italiana is deeply divided, its constitution worn down and treated with contempt by its own institutions. The prime minister is being punished with international ridicule and contempt for his Bunga Bunga affair, the ongoing government crisis and the country's unending debt burden.
"Ciao bella," a country -- not always exemplary, but treasured nonetheless -- is bidding farewell to its status as a top-tier country. The Italian economy shrank by 5 percent in 2009 and hardly grew at all in 2010. In its 2010/2011 report, the World Economic Forum cites the state as the greatest impediment to growth, with its inefficient government bureaucracy, tax loopholes, inadequate infrastructure and poor credit supply. The Italian central bank concluded last year that total industrial production is 25 years behind the times, and that 560,000 jobs were eliminated between the beginning of 2008 and the end of 2009.
Many Italians are, too. "I have fantasies of Rome's Piazza del Popolo turning into Tahrir Square," writes the young Sicilian blogger Enzo Coniglio, whose views are shared by many. "Basically, what is the difference between young Egyptians and young Italians?" Berlusconi will be 75 this September. Why, asks Coniglio, aren't we finally pushing our pasha into retirement?
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