Articles:
Italy doesn’t Need this Clown – or Berlusconi

The threatened return of the bunga-bunga warrior is only 

one part of the country’s refusal to face harsh reality 

He just cannot resist the spotlight. Why else would Silvio Berlusconi suddenly announce 

his umpteenth engagement to a woman half a century younger than him on a TV show on 

one of the billionaire mogul’s own channels? Why else would he have recently announced 

his umpteenth political comeback when no Italian thought he had gone away? Why else 

would he have flip-flopped shamelessly from running against the policies of his successor 

as prime minister, Mario Monti, to claiming he would support Mr Monti if the professor 

decides to take part in Italy’s elections, now expected in February? 

Yet the spotlight, and certainly international attention, now needs to resist him. For 

however much the old bunga-bunga warrior wishes it were otherwise, Mr Berlusconi will 

not be the central figure in Italy’s polls. He might eventually make a real comeback — if he 

looked east, the extraordinary revival of Japan’s previously humiliated ruling party should 

give him comfort — but not now. His spotlight-hogging reflects the fact that his position is 

weak and many of his supporters have deserted him. 

Instead, the central role in the elections will be taken jointly by the professor, a former 

communist, and a professional comedian. And, more broadly, by the question of whether 

Italians are willing to face reality or would rather continue to hide from it. That question, 

in turn, could prove crucial for the future of the euro. 

In the year since Mr Berlusconi was ejected from office by the international bond markets 

and the crumbling of his coalition, one group has continued to avoid the truth: the political 

establishment. In his annual speech at his Quirinale residence on Monday, the venerable 

President, Giorgio Napolitano, said as much. It had been largely a wasted year, he said, 

with little in the way of reform. His call in the same speech a year earlier for them to show 

“truth, intelligence and courage” had been ignored. 

That is not what you might think if you listen to bond-market analysts or commentators on European politics. According to them, Mr Monti, the man from outside the political class, 

has saved Italy and transformed its prospects. Sadly this is not true. He stabilised fiscal 

policy, cutting the budget deficit and ensured that his country is again welcome in the 

chancelleries of Europe, especially in Berlin. Beyond that, however, he has achieved little, 

apart from a few bits of stealthy tinkering. 

The main reason is inherent in the transitory nature of the Government he was asked to 

form a year ago. Although manned and womanned by non-politicians like him, it depended 

on support in parliament from a grand coalition of opposites, ranging from Mr Berlusconi’s 

right-wing party to the centre-left Democratic Party. They all knew that elections had to be 

held at the latest by April 2013, so if Mr Monti proposed anything they disliked the easy 

option was to play for time. 

Now, thanks to Mr Berlusconi’s antics, parliament will be dissolved more than a month 

early, with the election probably on February 17 or 24, so even fewer reforms will be turned 

into law than might have been. In the Italian system, governments reform by decrees that 

must later be replaced by proper laws, or expire. Many of the laws for even the quite 

modest reform of labour-market rules that the Monti Government introduced (to make it a 

little easier to sack people and to make those sacked feel a little better looked after) will 

now fall by the wayside. 

So the real battle lies ahead. Italy’s fiscal situation is under much better control than in 

Spain, Portugal or Greece, but it has achieved less in terms of market-liberalising or 

political reforms than any of those three. And it needs to achieve more, for although its 

sovereign debt catches the eye at more than 120 per cent of GDP, second in the eurozone 

only to Greece, the real problem is growth, which over the past decade has been the worst 

in the EU. Without growth, Italy will never manage to reduce those debts to manageable 

levels. 

The essential reason why Italy hasn’t grown is that it has piled up mountains of obstacles 

and deterrents to enterprise. Oligopolies (such as Berlusconi’s media empire), restrictive 

practices, high taxes, draconian labour laws, interminably slow justice and the spread of 

organised crime like a cancer from south to north, all block the natural entrepreneurial 

spirit of Italians, and deter foreign investment. 

It needs leadership from government to start clearing these obstacles. But government is 

deeply distrusted, and no wonder: the political class has shown itself to be interested 

mainly in feathering its own nest through high salaries, perks and corruption, or protecting 

its pet interest groups. 

Enter the real contest. In the red corner is Pierluigi Bersani, a moderate, dull former 

communist who now leads the Democratic Party, which is well ahead in the opinion polls 

with 30-35 per cent. He has a mildly reformist track record but may be too much in hock to 

his trade union and other leftist supporters to really push reform. 

In the “we’re all feeling blue” corner is Beppe Grillo, a comedian whose “Five Star Movement” is scaring the old parties and the Germans by running second at 20 per cent on 

a protest message against traditional politics and the euro, and somewhat incoherently in 

favour of replacing representative government with direct, internet-based democracy. It is 

known as the “Vaff” party, an abbreviation for a vulgar expression not translatable in a 

family newspaper. 

Finally, peering over the ropes is Professor Monti. He vowed not to take part, but is being 

lobbied to do so in the hope of strengthening the centre parties and countering Mr 

Berlusconi’s desperate buffoonery and Mr Grillo’s worrying negativity with some 

constructive arguments for reform. It would probably be better if he stayed above the fray 

and is chosen to succeed President Napolitano in May, but fears that the debate will be too 

negative and unreal may tempt him in. 

Italy badly needs a new government, probably a centre-left coalition, that acknowledges 

reality. But it is hard to be optimistic with so many forms of escapism on offer, from 27- 

year-old alleged fiancées to Vaffing comedians.