Italy in ashes

2011-11-19 10:53

Rome – the day after. The capital was basking under a golden November sun, looking very much the eternal city. Hard to believe that the political order was in meltdown, tempests were whipping up the bond markets, and default – a stunning prospect for one of Europe’s largest economies – was being talked about.

On November 8, Silvio Berlusconi had finally announced he would step down as prime minister, following a routine budget vote on which his majority came up short. Berlusconi had been losing credibility with Italy’s business and financial class for his cavalier approach to the recession and the debt crisis.

The butt of heavy European sarcasm and a virtual pariah at the recent G-20 meeting in Cannes, he had finally lost face even among his party faithful.

Yet there were no celebrations at Berlusconi’s departure; even “anti-climax” is too strong a word to describe the mood. Soon, it seemed, Italy might have a new government that somebody – the financial sector, the European Union, the Italians themselves – could believe in.

And maybe, nearly 18 years after it was born, Berlusconism (that seemingly comical political formula that united enriching the few with demagoguery, corruption and populist dreams) was finished. Maybe. But Italians were wary. They had seen Berlusconi rise like the phoenix from his ashes before. Not to mention that he leaves Italy in metaphorical ashes.

Announcing his resignation, he vowed to depart only when the austerity measures promised to the European Union had been presented and had cleared Parliament. It was rumoured he hoped to drag out this process for weeks and then have parliament dissolved and call immediate elections.

That same day, the yields on long-term government bonds soared more than 7%, punishing for the economy and impoverishing for the public coffers.

Italy was leaderless and rudderless, except for its respected President of the Republic Giorgio Napolitano, the only former Italian Communist Party official ever to serve as head of state and a man known as an impeccable public servant.

Napolitano intervened quickly, insisting that the austerity measures be approved over the weekend and that Berlusconi step down immediately afterward, before the markets opened on Monday.

He also, uncharacteristically, stepped into the political fray to make it clear he didn’t favour immediate elections but an interim government of qualified ministers that could push through possibly unpopular reforms with broad bipartisan backing.

His choice to replace Berlusconi, he indicated, was economist Mario Monti, a veteran European Union Commissioner.

Such an interim government was not a popular idea before the crisis erupted. Northern League leader Umberto Bossi, Berlusconi’s ally, had been eager to go to the polls in the event Berlusconi lost his majority, although many in the prime minister’s own party feared they would be trounced in elections.

Much of the opposition had been in favour of voting as soon as possible, from the anti-Berlusconi party Italia dei Valori, to segments of the large, centre-left Partito Democratico to the left-wing Sinistra Ecologia Libertà under Nichi Vendola. And this despite the fact that Italy labours under a seriously flawed electoral law, passed by a previous Berlusconi government.

Italians vote not for individual candidates but for a party list, and the party then names its MPs. Rather than answering to a district of voters, the MP is thus beholden to the party chief, a fact that Berlusconi ruthlessly exploited to keep his ranks loyal.

He was “the leader but in reality the owner – in the property-owning sense – of the Italian centre-right,” Stefano Folli, director of the Italian business daily Il Sole 24 Ore wrote recently.

Berlusconi also used government offices and access to public money to reward any middle-of-the-road MPs he could draw into his camp; in the estimate of veteran journalist Paolo Mieli, something like 10% of this Parliament was for sale.

Although Berlusconi’s grip on power has been weakening for the past year, he has been able to keep his troops in line because so many of their privileges and perks depend on the Parliament’s longevity – such as the generous pension that kicks in after just five years’ service as an MP.

Such dirty tricks, and the government’s lack of action to promote growth or ease recession, were more than Italy’s business community could tolerate. In recent months the manufacturer’s association Confindustria had criticised the prime minister frequently.

Even the turmoil in the bond markets, many have observed here, was not so much a problem of sovereign risk as political risk: No one believed Berlusconi intended to do anything about the debt.

Both on the left and on the right, many have questioned whether Italians should bow to harsh austerity measures like those imposed on Greece.

The right blames the European common currency for Italy’s problems, and Berlusconi himself called the euro “a strange currency that never convinced anyone”.

On the left, there were some calls for Italy to simply default, as Argentina did in 2002. L’infedele, a lively TV public affairs programme hosted by gadfly journalist Gad Lerner, recently hosted a fascinating discussion on the default hypothesis, concluding, however, that it was a risky and irresponsible option.

Instead, it has fallen to former Communist Napolitano to rescue Italian capitalism from free-market disaster.

And now – because they haven’t defeated Berlusconi politically, in elections – it falls to the centre-left to back the probable Monti government, which will certainly have to implement painful debt-reducing measures.

The best that can be hoped is that the left will be able to protect Italy’s welfare state, and put a redistributive spin on austerity with a wealth tax or other such alternative revenue plan. And perhaps use their prestige in Europe to try to push the European Union toward a less punishing, less conservative vision of fiscal and monetary responsibility.

Besides the ruins and the ashes, what does Berlusconi leave behind him? He has been compared to Mussolini – a comparison he himself has indulged – yet political theorists all agree that Berlusconism is not akin to fascism.

Far from wrapping himself in the absolute power of the state, Berlusconi is an anti-politician; he has never expressed anything but scorn for the day-to-day business of lawmaking and governing. Unlike the classic conservative who promotes neoliberal interests, Berlusconi has nearly always pursued only his own interests and those of his friends who can in turn do favours for him.

Just one example: His company Fininvest, which grew seven times between 1994, when he first came to office, and 2011, lost 12% on the stock market the day he announced he would resign.

Along with this very personal pursuit of wealth through political power, Berlusconi carefully cultivated a public image as the consummate self-made man: plain-speaking, unafraid to flout protocol and convention, fun-loving, pleased to enjoy his wealth, a man of the people made good.

His experience in the television business and his control over the media while in office, via the public channels as well as his own commercial ones, played a huge role in his popularity. The decline of TV in favour of the web interestingly parallels Berlusconi’s decline.

His ability to portray mere self-defence – against judges investigating him, or political adversaries – as a defence of the little people against “Communists” or an intrusive state was notable.

If he was able to appeal so successfully to Italians who fear the taxman and the bureaucracy, it is also because there are many of them. His sour legacy will include a nativist-style distrust of Italy’s European partners and a cynical view of politics that will be with Italy for a long tim

e.

There is one respect in which Berlusconi’s pseudo-populism seems to belong more to Eastern Europe or Russia than to the West. From the beginning, his business, and later political, career has been dogged by suggestions he has been too close to Cosa Nostra.

Where did he get the money he invested in his first business, a building company? It’s a question he has never been willing to answer, although we do know that his funding came through a bank that took Mafia deposits.

His oldest friend and close aide Marcello Dell’Utri has been convicted of mafia association. What does Berlusconi know about that?

The many, beyond Italy, who have seen the man as a largely harmless, sex-crazed buffoon might want to give such questions a moment’s thought.

» Randall, a journalist and translator based in Rome, has written on Italy for the Wall Street Journal and the New York Times. Copyright The Nation. Distributed by Agence Global

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