- The Washington Times - Saturday, April 15, 2006

FLORENCE, Italy.

Like the old saw about real estate, there are only three things you need to know about Italian politics today: Berlusconi, Berlusconi and Berlusconi.

Prime Minister Silvio Berlusconi’s center-right coalition seems to have lost by a tiny handful of votes — 25,000 out of more than 38 million votes cast — to the center-left coalition led by former Prime Minister Romano Prodi. Mr. Berlusconi demanded a recount, but BBC News has reported it is doubtful recounting challenged votes will alter the result.

Though he apparently won by less than one-tenth of 1 percent, under a new law pushed through by Mr. Berlusconi, if the results hold, Mr. Prodi will automatically be awarded 340 seats in the new parliament, while Mr. Berlusconi will get only 277. In the Senate, which is required to approve all legislation, Mr. Prodi also held on to a razor-thin majority.

Italy has huge problems. During the most recent five years, the growth rate of its gross domestic product (GDP) has averaged just below 0.7 percent — the lowest among the big countries in the Organization for Economic Cooperation and Development. For the last year, it was 0 percent. Its export markets for textiles, shoes, machine tools, fine cars and more are being eaten by China, India, Japan and others. Its budget deficit now stands 30 percent above the European Union’s ceiling.

Perhaps above all, its young people are in despair. The employment rate for its working-age population is 58 percent — the lowest in the EU. Eighty percent of all men between ages 18 and 30 live with their parents, many because they are unemployed or underemployed or because their jobs don’t pay enough to cover the extremely high cost of housing. The result: A collapsing population with a birthrate of 1.3 children for each woman of childbearing age. The only hope Italy has of maintaining a population base and of paying retirement benefits for its aging population is immigration — and the Italians, like other Europeans, are terrified of immigration.

Despite those issues — and more — all Italians were talking about in the run-up to the elections last week was their mercurial prime minister, Silvio Berlusconi: Berlusconi and his personal legal problems; Berlusconi and his habit of insulting people; Berlusconi and his face-lift and hair transplant.

In the last few weeks before the election, Mr. Berlusconi said, repeatedly, that the Chinese, under Mao Tse-tung, boiled babies to make fertilizer — obviously implying that the Italians, under Mr. Prodi and his communist allies, would do the same. A couple of days before the election, he publicly described people who would vote for his opponent by using a barnyard term for a part of the masculine anatomy, which left radio and television broadcasters gasping — including those who work for him. Earlier, Mr. Berlusconi created a furor at the European Parliament — and in Germany — when he accused a German member of acting like a Nazi prison camp guard. A few weeks ago, he said he had accomplished more than Napoleon, and when he was asked about that, he called himself, “The Jesus Christ of Italian politics.”

Mr. Berlusconi has reveled in making himself the core issue in the campaign. The opposition has been falling all over itself to take the bait. In the end, it appeared to many observers with no ax to grind that Mr. Prodi’s coalition, which runs the spectrum from former Christian Democrats on the right, including Mr. Prodi himself, to former communists, calling themselves the “Democrats of the Left,” and the unreformed communists, calling themselves Communists, simply could not agree on the major issues: taxes, social security, workers’ rights, Iraq and so on. Whenever they addressed the issues, they contradicted themselves. The could only agree that they all hate Mr. Berlusconi.

Mr. Berlusconi won an absolute majority in the Parliament five years ago and held power for the longest period of any postwar prime minister, largely on the basis of an unlikely coalition — between, on the one hand, rich northerners, many of them former supporters of the “Northern League,” a party that supported secession from the poor south, and, on the other hand, poor southerners. According to an anti-Berlusconi lawyer in Milan, it was an alliance between fascists and near-fascists in the north and gangsters in the south. Like many anti-Berlusconi northerners, she said flatly Mr. Berlusconi’s success in the south was due to his involvement with the Mafia.

It would seem Mr. Berlusconi’s loss, this time, was due to a sharp drop in his popularity in the south. If that had anything to do with any Mafia connection, it is ironic that last Tuesday, the day after the election, the government announced the arrest (in the cinematically important village of Corleone, Sicily) of the “don of dons,” Bernardo Provenzano.

The conventional wisdom is that many Italians saw Mr. Berlusconi — Italy’s richest man, a self-made billionaire who dominates the Italian media, owning three of the country’s largest television networks — as the country’s best hope to solve its economic problems.

In fact, under his leadership, things have worsened. In the last five years, parliament passed two major laws designed to help the economy — one forcing employees to work longer to qualify for retirement and one making it easier for employers to hire — and fire — workers on “short-term” contracts. Other than that, Parliament was tied up largely with passing legislation to ease Mr. Berlusconi’s personal legal problems. It redefined some crimes of which he has been accused to make them less serious. It has shortened the statutes of limitations for certain crimes. It tried, for a while, to give him blanket immunity from prosecution.

Simultaneously, the government adopted amnesties for tax evasion, and Mr. Berlusconi launched personal and professional attacks on the government prosecutors who pursued their cases against him. (Most recently, he has been accused of bribing a British witness, married to a British Cabinet secretary, in a case against him. Previously, he has been accused of bribing a judge.)

Mr. Berlusconi has been extremely effective at making enemies, but, obviously, he made lots of friends along the way. A Florentine investment banker in his mid-30s — a Berlusconi supporter — was asked what he thought of the Berlusconi habit of insulting others. He noted that a few years ago there was some public outrage because the vast majority of Italian professional football players were unable to sing their national anthem. He said Italians do not have the same kind of patriotism as other nationalities, and have accepted insults other nations have not. By sticking his thumb in other people’s eyes, the banker said, Mr. Berlusconi has helped some Italians feel better about themselves.

But only some — many others see him as a huge embarrassment, and they cannot wait to dance on his political tomb.

Without him, where do things go? While Mr. Prodi has opposed Italian participation in the coalition in Iraq, many Italian observers think it is unlikely he will order an immediate pullout of Italy’s troops — the largest contingent after the Americans and the British — as did Spanish Prime Minister Jose Luis Rodriguez Zapatero following his election a couple of years ago. But Italy will pull out.

And while Mr. Berlusconi has been seen as more interested in fostering close relations with Washington while paying less attention to Italy’s partners in the EU, Prodi, the former president of the European Commission, has expressed concern about the “unipolar” world dominated by the U.S. and will try to promote development of an EU foreign and security policy. He will certainly change the vocabulary in Rome, in Brussels and throughout Europe.

For those, he won’t need a large majority in parliament. Making changes needed to get Italy’s economy moving also deserves wide attention. Italy’s economic stagnation is vitally important, not only to its 58 million people, but to the rest of us, because it has either the sixth- or seventh-largest economy in the world, depending on how you calculate the part that’s done under the table.

George H. Lesser has reported for more than 30 years on international political and economic developments for both U.S. and European publications. He has been based in Washington, New York, London and Brussels, and lives in Washington D.C. and Florence, Italy.

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