Silvio Berlusconi: He'll Be Back

With more money than any man in Italy and a bigger share of the media than most, it would be foolish to write off Il Cavalier just yet.
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The other night I found myself in a pizzeria in an anonymous suburban Rome neighbourhood, after a night of seven-a-side football. While the heavily tattooed waiters brought round beers and suppli, the lads I was with were dishing out ratings for everyone's performance – I got a solid 6.5, after a solid display at the back and a screamer from the edge of the area – and toasting the demise of Silvio Berlusconi, who had only just been booted from his place as Prime Minister. Ever the party pooper, I pointed out that getting rid of Berlusconi alone isn't going to solve the many long-standing problems that Italy has: a bloated, corrupt political class remains, as do many of Silvio's key allies. And now we have an unelected, apparently apolitical technical government in place, which in reality isn't apolitical at all, just a return to the traditional right-wing Christian Democrat values that dominated before Uncle Sil came along. Over the course of the evening various solutions were proposed: lower salaries for MPs, cutting their pensions, drastically reducing the number of comuni (city councils). But the big one that got everyone nodding was a ban on all MPs doing any kind of other work once in office; as far as the people at my table were concerned rooting out the conflicts of interest endemic in Italian political life will be key if the country is to permanently get itself out of hock. It certainly wouldn't be a bad start.

Let's start with some stats, just in case you're not entirely aware of just how parlous a state the country's finances are in: Italy is the world's eighth largest economy, and the third largest within the Eurozone, after France and Germany. Its GDP is around €2trillion. It's public debt is 120 per cent of its GDP, at around €2.2trillion. As pointed out in my previous article on this subject, public sector waste is everywhere, at every level: Italy's MPs are the highest paid in Europe, and there are 630 of them; there are 8,093 comuni (Lombardy has 1,546 alone), each with a whole staff of people getting fat off the state; €212,274,000,000 was spent on pensions for around 16,000,000 people in 2008, over half of what was spent on social security that year (€414,738,000,000); there are 72,000 government cars whizzing politicians to lunches, dinners and the theatre (In the UK there are 196); and if you're an MP for just a year you get a lifelong pension. Add that to all the money wasted on public contracts given to mafia-run firms for jobs that never get done, on top of rampant tax evasion and you can see that there is some serious work to be done. Which is why no-one other than Berlusconi and his allies is lamenting the temporary suspension of democracy that has come with Mario Monti's technical government; if anything having a team of professors (seven in a 17-man cabinet, which also includes the Admiral Giampaolo Di Paola, chairman of NATO's military committee, as defence minister) already makes the country more respectable than it was under the distorted form of democracy that characterised Berlusconi's premiership. When you think that his last cabinet 'included a former calendar girl, a minister who walked a pig on land earmarked for a mosque and another said to have links to the Cosa Nostra', it should hardly come as a shock that so many people are more hopeful than they have been for a decade. For one thing, a government that won't last beyond 2013 has no need to tie itself to the mob.

As John Hooper points out in the Economist, Berlusconi and his PDL party (Popolo Della Libertà, or People of Freedom) won't have to take any flack for the savage cuts which are coming Italy's way.

Already Monti has proposed several ideas that are likely to be fairly unpopular, including another rise of VAT to a whopping 23 per cent. One, however, could be a winner: a lowering of the limit on the highest amount you can legally pay for something in cash from €2,500 to €500, or even as low as €300, which the government claims would see them recoup €40million from the black economy. Italy is the country that uses cash more and cards less than any other country in Europe; 95 per cent of all retail purchases are done in cash, which a recent survey suggested was partly out of habit, and partly because of fear of fraud and card cloning. The idea of this measure would be to clamp down on money laundering by tracing the flow of money, and although enforcement will be the key to making it work, it does have the potential to hamper the country's four mafias (the Chinese mob is also growing in power here): restaurants are one of the key places where money laundering takes place, with some estimating that in Rome and Milan as many as one in five are in the hands of Bosses. This is because everything is done in cash, and lots of money can be recycled very quickly, much of away from the eyes of the authorities – especially the tax man. Clans from Sicily's La Cosa Nostra, Campania's Comorra and Calabria's 'Ndrangheta (which is incredibly powerful in Milan: on Saturday 1,000 years of jail time was dished out to 110 of their Lombardy-based gangsters, a result achieved without help from a single informant) have huge sums invested in restaurants. This isn't just a local thing either: Rome-based daily La Repubblica notes that 'clans that wage wars amongst themselves in Calabria find themselves business partners thousands of miles away'. While there will no doubt be ways around this limit, especially if enforcement is lax, it is at least a sign that the people in power are looking rationally for solutions.

However, those who think that this new era means the end for Berlusconi are way off the mark: he might have lost his majority in the lower-house Chamber of Deputies, but he and the separatist Lega Nord, his key coalition allies who are opposed to the Monti government, still hold the majority in the upper-house Senate, and they can still block legislation in there should they so wish. As John Hooper rightly points out in the Economist article linked to above, Berlusconi and his PDL party (Popolo Della Libertà, or People of Freedom) won't have to take any flack for the savage cuts which are coming Italy's way, and nor will the Left. Meanwhile the former man in charge is now looking at a very busy month, facing charges 'for fraud, bribery and paying an under-age girl for sex'; now that he's no longer the premier, he can no longer avoid his day in court by flying to summits abroad, and nor can he try and force through legislation making him immune to prosecution. Despite all this though, he remains Italy's richest man, and one who owns huge tracts of the country's media; as soon as he stepped down on the 13th he made a video for television in which he enthusiastically blew his own trumpet and denied that his political career was over. It would probably be naïve to assume otherwise.

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