Giulio Tremonti took Italy out of crisis and voters should thank his boss
I t’s been years since I thought I could write a word in favour of Silvio Berlusconi. The girls, swimming pools full of them; the suffocating control of Italy’s media; the endless speeches about reform that never happens. I’d long concluded that Italy would be better without a Prime Minister who had become the story rather than the agent of change.
That is still my view. But I have to admit two points. First, many Italians back him. Yesterday his conservative coalition won four regions from the opposition in local elections, despite predictions that it would lose. There is no choice but to credit some of that to the “Mediterranean man” factor, as Italian pundits call it. Voters forgive or even admire him for behaviour that would disqualify him from British politics, never mind the puritanical US.
His spokesman says, baldly: “Divorce happens to many people, even nice ones,” glossing over the provocations that led Veronica Lario, Mr Berlusconi’s wife, to file for this particular divorce.
But a bigger reason for voters’ indulgence is that Italy has fared surprisingly well in the global financial turmoil. Let me be more precise — it is not that Mr Berlusconi has run the economy well, but that he appointed Giulio Tremonti as Finance Minister in May 2008 and had the wit to keep him in place. Mr Tremonti, a good candidate for Europe’s best finance minister, has turned a near-disastrous position into a survivable one.
Italy had seemed to be heading for the position of Greece: unable to trim its huge public sector or to persuade people to pay more tax, hemmed in by debt and in serious danger of showing that a country which had adopted the euro could crash out of the currency bloc. Asked how craftsmen in northern Italy would compete against cheap Chinese handbags and shoes, ministers would say weakly: “But we make nicer ones.”
No longer. Italy has navigated the two years without collapse in finances or huge panic about its debt. Mr Tremonti resisted Mr Berlusconi’s pressure to cut taxes or to launch a big stimulus. Did that make Italy a free rider on those countries who did these things? Sure, but Mr Tremonti was right that Italy couldn’t afford it. Its debt, at 115 per cent of gross domestic product, has been higher than Greece’s. But its budget deficit — the gap between government spending and income — is less than half of Greece’s, at less than 6 per cent of GDP.
Still not a breeze — and ministers have no good answer to the Chinese handbags question. Nor has Mr Berlusconi’s team begun to tackle desperately needed reforms. But Mr Tremonti has done enough to take Italy out of crisis. For that — but that alone — voters are justified in thanking Mr Tremonti’s boss.
http://www.timesonline.co.uk/tol/comment/columnists/bronwen_maddox/article7081887.ece
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