Italy would be well rid of Silvio Berlusconi. It is not simply the tawdry sexual escapades, the whiff of corruption or the crass boorishness of his sexist remarks that have tested the patience of his embarrassed compatriots. It is his abject failure, after a total of eight years in office, to bring about any meaningful reform to Italy’s sclerotic body politic, his repeated failure to carry through promises and his mismanagement of Europe’s third-largest economy that have destroyed his political credibility and now pose an existential threat to all Italy’s partners in the eurozone.
The exchange of weary glances between Angela Merkel, the German Chancellor, and President Sarkozy when asked at the emergency summit on the euro whether they trusted Mr Berlusconi said it all. Europe is heartily sick of this buffoonish Prime Minister, whose insouciance, irresponsibility and political cowardice have so exacerbated the present crisis. Had Italy taken decisive steps to reduce its colossal debt, to carry through urgent tax and budgetary reforms and to stand firm in the face of trade union obstructionism and the lobbying by special interests, the haemorrhaging of confidence in the eurozone’s future might have been stemmed. Instead, Mr Berlusconi’s prevarication and evasions, his refusal to accept responsibility or play by established rules, have brought Italy to the brink of financial disaster. And if Italy cannot be saved, nor can the entire euro experiment.
There were hopes yesterday that Mr Berlusconi, squeezed between the demands of France and Germany for a coherent plan for fiscal reform and the opposition to any retrenchment by his opportunistic Northern League coalition partners, would be forced from office within days. President Napolitano could then have appointed a stop-gap government of technocrats to pass urgent reforms. But at the last moment Mr Berlusconi did a deal with Umberto Bossi, the maverick leader of the Northern League, which will allow him to offer a “letter of intent” to his impatient EU partners while avoiding any specific commitments. In return, the embattled Prime Minister is reported to have promised to resign within the next month or two and call a snap election in the spring to exploit the disarray in the centre-left Opposition.
This is the worst of all worlds. Without any timetable for reform and domestic wrangling precluding the austerity measures so urgently needed, the European Central Bank will not be permitted to buy Italian bonds on the scale needed to avoid the country being overwhelmed by repayments on its massive debt pile. And Italians, instead of being honestly confronted with the desperate state to which their blundering Government has reduced them, will be sidetracked into election politics and the scapegoating of their EU partners for their own predicament.
There should be no doubt about the challenges now facing Italy or the failure by Mr Berlusconi’s administrations, in 2001-06 and from 2008 until now, to meet them. Italy is one of the most indebted nations in the world, owing €1.9 trillion. This is equal to 120 per cent of its GDP. The three main credit rating agencies have all downgraded Italy recently, and yesterday the borrowing costs on short-term bonds rose to 3.53 per cent, the highest level in three years.
The sensible, but insufficient, measures proposed by Giulio Tremonti, the Economy Minister, include the opening of closed professions, cutting red tape and raising revenue through privatisations and a new wealth tax. All have been delayed by a prime minister scared of voter reaction. Two months ago this newspaper gave warning that Mr Berlusconi’s fecklessness was turning a localised problem into an emerging disaster. That disaster has now engulfed Italy and its neighbours. His best service now to his country would be to resign forthwith.
http://www.thetimes.co.uk/tto/opinion/leaders/article3207406.ece
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