Thursday, July 22, 2004

News not fit to print

On Tuesday (20 July), at lunchtime, I get a call from the BBC World Service’s “Europe Today” programme. “What do you think”, I am asked, “of Paolo Berlusconi getting a four year sentence for false invoices?”

This was the first I’d heard of it but I’d been doing other things in the morning. I try and find out more about what had actually happened. He had previous convictions with suspended sentences for corruption and other accounting crimes (some charges dropped when his brother decriminalised false accounting). It sounded very much as if he would actually have to see the inside of San Vittore, Milan’s main gaol. Politically there would be repercussions; to be sure Silvio was not directly involved but he and Paolo worked closely together and many of the Prime Ministers responsibilities were passed on to his younger brother when he went into politics. With the government showing ever-growing cracks, this news looked like another serious fissure in the Berlusconi edifice. Maybe, I dared to think, if Paolo’s trials can finish, even Silvio’s trial for corruption might reach a verdict.

While talking to the BBC person, I go to the Repubblica site to see how they are treating the story. There is nothing – their lead is a speech of President Ciampi’s saying that Italy’s progress depends on “Unity and the Constitution”, hardly controversial. What about ANSA, the country’s principal wire service; again nothing. Surely Unità could be relied upon to use dirt on any member of the Berlusconi family; again nothing. Marianne of the BBC is surprised but says she will check with the BBC monitoring service. And I also recheck.

Looking more carefully at the ANSA site, I find a 69 word dispatch - False fatturazioni: inflitte le con... timed at 11.29. Paolo Berlusconi had indeed been convicted again, but to four months and 15 days not four years. On closer inspection, I find the Repubblica wire, It is a little longer at 138 words timed at 11.35. It points out that Paolo Berlusconi is the Prime Minister’s brother and that this sentence should be served consecutively to his other year and 9 month sentence passed two years ago. Mr. Berlusconi’s company SIMEC had issued false invoices to other Berlusconi-owned companies for rubbish and waste disposal in the Nineties. This conviction was for issuing false invoices in order to defraud both the councils and avoid paying taxes. For the 2002 conviction, he plea bargained the sentence on other related charges down at the same time as paying damages of €85 m. to the councils and the tax authorities.

Marianne and I discuss whether at only four months, this is a story worth doing and we decide that it probably is not (but agree that in any other country if the PM’s brother gets sent down for four and a half months for business dealings relating to family wealth, it probably is a good story). Later, the “Europe Today” editors change their minds but without a mobile, I didn’t know till too late so I do not do the interview and they do not run the story. At that point, I thought it was the end of the matter and that I’d wait for the papers the next day for a bit of background.

I hardly expected Paolo Berlusconi’s own Giornale to lead with the story but I’d hoped for the neutral and opposition papers to give it a good spread. Instead the resounding silence went beyond the Berlusconi family papers. Corriere della Sera did not mention the matter; not only was there no comment, there was not even an “in brief” account on the Italian news pages. Repubblica, storngly anti-Berlusconi, gave the story three short columns at the top of page 20 and even Unità only gave it two very short columns at the bottom of page 3. The news broke mid-morning so there was plenty of time to produce acres of print if an editor had wanted to but obviously no one thought it interesting enough.

That is the charitable explanation; the less charitable explanation is that dealing in waste disposal always leaves unpleasant odours and that if the Prime Minister is involved, even indirectly, it is better to leave well alone and even for the opposition, not to dig too deeply.

Please let me know if your comments may be posted on the blog either with or without attribution;
do us know if you do not want to receive the blog and let us know of others who do want to receive it:

The blog’s address for back numbers is:

Friday, July 09, 2004

The end of Berlusconi?

It’s exam time for anyone who has to comment on Italian politics; the question I have been asked this last week is “is Berlusconi’s government going to fall?” His faithful economics minister, Giulio Tremonti, was forced to resign last week and there have been loud and ominous creaking noises coming from the coalition structure.

The easy answer is that the Prime Minister is in trouble but he is very far from being on the ropes. The question for the exam is: Will Mr. Berlusconi’s government end: a) on 16 July when the leaders of Marco Follini’s centrist UDC meet and withdraw their support? b) in the autumn when the budget planning document (the DPEF) and the budget itself have been published and enough members of the coalition realise the the figures do not add up to political reality to withdraw their support? c) next spring because no one in the coalition dares pull the house down sooner but they can drag the crisis out for another nine or ten months to make the collapse look like an (almost) natural occurrence? And d) Silvio Berlusconi serves out his full five year mandate and stands for re-election in spring 2006.

This is not just the idle chatter of political scientists and journalists during the summer vacation. Standard & Poor’s has already lowered Italy’s credit rating as if to say that even if the European Commission is prepared to give Mr. Berlusconi’s promises to keep his budget deficit under 3% of the GDP, they are less trusting. “Fidarsi è bene” as the Italians say, “ma non fidarsi è meglio” says Standard & Poor’s.

More than the credit rating, there are possible serious consequences on Italy’s relationship with the EU if she does not keep to euro standards; to Italian state owned businesses like Alitalia and the state broadcaster, RAI, if the government really does apply market economy standards across the board; and to any Italian who depends on the welfare state in some way if Mr. Berlusconi really does impose tax and spending cuts.

Not to mention Mr. Berlusconi’s conflict of interest which has grown by leaps and bounds this week as by becoming Minister for the Economy, he has taken on direct responsibility for the RAI, the direct competitor of his own Mediaset.

The story and the options changed over the week too; first the Prime Minister was going to keep the economy portfolio just for a few days (with the near presumption that much respected European Commissioner Mario Monti would take over – Monti politely said “thanks but no thanks” to the poisoned chalice). Then Mr. Berlusconi said that he would stay in the Ministry for some months “until the reforms are through”. The dissidents in the coalition said he should not stay for more than a week. So now the likelihood is for a summer holding operation.

The reasons for all this action are the fundamental ones in politics – power and policy. The policy is the proposed cut in income tax, one of the items on Mr. Berlusconi’s “contract with the Italians”, his five point election manifesto. He has been talking more and more about the cuts since the beginning of the year much to the nervousness of the Alleanza Nazionale and UDC leaders, Gianfranco Fini and Marco Follini.

These two know that Mr. Micawber was right and that in order to balance your books (which Italy must do so as not to get into trouble with the European Commission), if you reduce income, you must reduce expenditure. And they do not want to cut spending on welfare or investment in the South.

As for power, both men have been very docile and cooperative during their three years in power. There are two elements to the present change, short term and long term; in last month’s European elections their parties increased their relative weight in the governing coalition, particularly the UDC and so Mr. Follini feels that he should have more positions in government. If anything was ever conclusive in Italian politics, then the present spat should close the manoeuvres or verifica which started at the beginning of the year in order re-calibrate the relative power of the coalition members. If the government holds, we are very likely to see more UDC people in ministries.

The more longterm motive for unseating Tremonti is the fight for Berlusconi succession and here the sparring has just begun with the main contenders being Fini himself on one side and some sort of reinvented Christian Democracy on the other.

So at the end of the week, which option do I go for? Despite much huffing and puffing, Follini is unlikely to do anything drastic next week and though there have been summer crises in the past, they are improbable as most Italian politicians are thinking more of beaches than the corridors of power. Crunch time will come when the budget is examined and all of us from the European Commission to the Italian voter will see if and how the tax cuts will materialise. Even this will not mean a government crisis but certainly the possibility has come much closer leading to a new Berlusconi-led government.

Elections are still a long way off but the end of Silvio Berlusconi’s second government is much closer.