Berlusconi Says He's Leaving: Is This the End of Italy's Politics of Burlesque?

Updated

There's a certain poetry to the fact that it was economics and not politics that spelled the beginning of the end for Italy's Prime Minister Silvio Berlusconi. The flamboyant politician is Italy's richest citizen, the founder and owner of one of the world's largest media company, and — for many Italians — the man responsible for making their largely peripheral economy synonymous with end-of-empire decadence.

And there he sat, Tuesday afternoon, clench-jawed at the result of a vote that exposed the depth of his political weakness. The 308 parliamentarians who voted in favor of the routine budget bill were enough to ensure its passage. But the real significance was in the 322, including many from his own party, who declined their support. By evening, Berlusconi had met with Italy's President Giorgio Napolitano, agreeing to tender his resignation as soon his government passed a series of planned economic reforms, with a vote perhaps scheduled as early as next week.

And yet it was nothing the opposition did that cost the sex-scandal ridden prime minister his majority. Over the course of the previous week, Berlusconi had watched his coalition crumble under pressure from the bond markets, as the crisis in Greek shone a harsh Mediterranean light on the cracks and strains in the Italian economy, one of the most sluggish in the European Union.

With public debt at roughly 120% GDP, the country has been judged to be in desperate need of reforms, most recently by the European Union which last week insisted that Berlusconi agree to a raft of measures that would raise revenue, cut spending and liberalize the economy. And yet, even as markets increased their pressure, prompting the E.U. and the International Monetary fund to pledge their support for the Italian economy, investors were clearly losing confidence in the prime minister's ability to deliver.

And who could blame them? Berlusconi had promised again and again — ever since his first political campaign — to pass measures that would boost competitiveness, attract foreign investment and open the job market to the one in four young Italians who, not working or studying, have dropped out of the formal labor force altogether. Yet, though Berlusconi has dominated the nation's political scene since 1994, including as head of government for eight out of the past 10 years, reforms have been few and far between. Over the past decade, the economy has remained nearly flat, trailing the other members of the euro zone by at least a full percentage point.

That was surprisingly acceptable, says Franco Pavoncello, a political scientist at Rome's John Cabot University, when the global economy was relatively healthy. As long as the European Union was seen as the bulwark that propped up its member states, the actions of politicians like Berlusconi didn't make a difference. The crisis in Greece changed all that. Suddenly, Berlusconi's erratic behavior and personal scandals weren't merely occasions for amusement. They were cause for alarm. "He's a liability at this stage for Italy," says Pavoncello. "That's how he's perceived by the markets for sure."

In recent days, analysts had taken to talking about a "Berlusconi premium" in the Italian bond market, with some attributing as much as a full percentage point of the cost of servicing Italy's debt to doubts about his governments stability and commitment to reforms. Perhaps the moment that best encapsulated the world's opinion came during a press conference during crisis talks in Brussels in late October, when German Chancellor Angela Merkel and French President Nicolas Sarkozy responded to a question about Berlusconi's financial reforms by exchanging smirking glances, causing journalists in the room to burst out laughing.

Many in Italy won't be sad to see him go. Not only has Berlusconi presided over a stagnating economy, he is seen by many as having personally contributed to a coarsening of Italian culture. Never mind his personal life and his sequential series of sex and prostitution scandals — including one in which he stands accused of paying for sex with a 17-year-old nightclub dancer. Berlusconi brought a brand of personal patronage to the political scene, using an electoral law in which citizens vote for party lists, rather than individual candidates, to sweep into parliament a retinue of private lawyers, executives from his companies and even showgirls from his television stations. "He's at the center of the court, surrounded by courtiers, to whom he dispenses favors," says Maurizio Viroli, an expert of Machievelli, and author of The Liberty of Servants: Berlusconi's Italy, a book that compares the prime minister unfavorably to Machiavelli's Prince. "He was extremely good at understanding that the best way to control citizens is to entertain them, to amuse them, to distract them."

And yet it would be a mistake to count the prime minister out. For Berlusconi, the stakes couldn't be higher. He has more than his political career to think of. Losing office would also leave him exposed to multiple criminal charges, including accusations currently working their way through the court system — charges of corruption, abuse of office and prostitution with a minor. According to the author Alexander Stille, Berlusconi entered office at least in part to avoid being swept up in a 1990s corruption investigation that had swept the old guard out of power and opened the door to a new generation of politicians. "I am forced to enter politics, otherwise they will put me in prison," Stille quotes him as saying at the time. And indeed, Berlusconi has spent much of the past 17 years in a slugfest with his country's judicial system, beating some charges after his ruling majority changed the law. Earlier this year, a law his government had passed shortly after taking power in 2008 granting him full immunity was struck down by Italy's constitutional court. An expulsion from government would leave him more vulnerable than ever.

Nor would his economic fortune necessarily remain safe. In Italy's heavily regulated, quasi-statist economy, any business is going to have interaction with the government, and Berlusconi's vast media and publishing holdings are no exception. So it's no surprise that as news of Berlusconi's misfortunes have mounted, the stock price of his family company Mediaset has sunk accordingly, on worries that the new government would introduce previously floated measures to rein in its influence of curtail its acquisition of future digital television rights. "Clearly, this is something that a lot of people might say, ok, maybe with another Italian government, the story would be different," says an analyst covering the company, who asked to remain anonymous citing political concerns.

Berlusconi will still have many chances to cling to power. Even stripped of political office, he will remain the country's richest man and the owner of three of its seven television channels. Meanwhile, the timing of his resignation remains unclear. Though he has in the past said he would introduce the reforms the European Union has asked for as early as next Wednesday, there is no agreement yet on exactly what form those will take, and the date has already begun to slip. One ally even suggested Berlusconi's reforms — and his consequent resignation — might not be in place until the end of November.And what would a new government be like and how long would it last? Taking to the airwaves shortly after the announcement, Berlusconi said he would favor early elections, rather than a new government carved out of the existing coalitions. And in an interview with La Stampa Berlusconi said he would not be a candidate for office.