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Berlusconi finds fresh territory for his politics of peekaboo

November 5, 2009

By Guy Dinmore in Rome

Published: November 5 2009

Otto von Bismarck once derided Italians for having a “very large appetite and very bad teeth” and counting for nothing in the affairs of the world. But then the German chancellor had never met Silvio Berlusconi.

While an introspective Europe remains transfixed with sharing out Lisbon treaty positions of power, and critics at home are distracted by his alleged sex scandals and spats with ministers, Italy’s premier is successfully staking out national, and personal business, interests on the fringes of the European Union.

The billionaire media magnate attributes his efficacy to building close personal ties with fellow leaders – a strategy he calls cucù – peekaboo – after he once popped out from behind a fountain to greet Angela Merkel of Germany.For mainstream players on the world stage, Mr Berlusconi’s controversial lifestyle has served only to reinforce the stereotyped image of Italy abroad as fickle and lightweight. Diplomats say this was evident when Germany, France and the UK recently cold-shouldered Rome in jointly proposing a conference on Afghanistan, ignoring that Italy, a significant troops contributor, had already made such a call.

Italy’s sense of being unjustly sidelined – a syndrome that predates Mr Berlusconi – was inflated last week when sums by US bankers showed Italy’s gross domestic product had overtaken that of the UK – largely thanks to sterling’s slide.

Yet working on the edges of Europe in his own quirky way, Mr Berlusconi is stealing a march in building commercial and energy ties, chiefly with Libya, Russia and Turkey.

Peekaboo politics might not go down well with some strait-laced Europeans but it was effective with Britain’s Tony Blair – supported by Mr Berlusconi in his bid to be Europe’s first president – and is now paying dividends with Muammer Gaddafi, Vladimir Putin and Recep Tayyip Erdogan.

This was clear in the Italian leader’s trip to St Petersburg. Ostensibly a “private” visit to celebrate Mr Putin’s birthday, its opaque nature was enhanced when Franco Frattini, foreign minister, admitted that he did not know the agenda or invitation list. Away for nearly four days, Mr Berlusconi skipped a meeting in Rome with King Abdullah of Jordan and missed a cabinet session – officially because bad weather delayed his return. But as noted by Roberto Menotti, analyst at Italy’s Aspen Institute, affairs of state were paramount.

Mr Berlusconi lobbied for Russian contracts for carmaker Fiat and Finmeccanica, an industrial conglomerate. The two leaders agreed to speed up the giant South Stream project between Russia’s Gazprom and Italy’s Eni to pipe Russian and central Asian gas to Europe under the Black Sea.

Mr Erdogan joined via video link from Turkey, following up deals reached that week between Turkish, Russian and Italian energy companies to use Turkey as a transit route.

“Berlusconi got things done,” comments Mr Menotti. “His style may be strange but this triangular diplomacy makes sense.”

Behind the scenes, one of the most influential figures driving Italian foreign policy is Paolo Scaroni, the government-appointed head of Eni who regularly travels with Mr Berlusconi and dines with Mr Frattini as they work out how to promote Italy’s interests.

“Merkel defends Opel, Obama protects Detroit. Why would Italy not listen to Eni in dealing with Russia?” comments Mr Menotti. “The global crisis has highlighted this trend.”

Mr Frattini defends cucù contacts as a useful tool in Italy’s strategy of diversifying its sources of energy. Italy gets 30 per cent of its energy needs from Russia, 30 per cent from Algeria and 28 per cent from Libya. Development of nuclear power will provide another pillar.

The importance of the friendship treaty agreed by Colonel Gaddafi and Mr Berlusconi last year has been underestimated in both symbolic and commercial terms, Mr Frattini tells the FT. “Italy is the first country to admit the wrongdoings of colonialism . . . It gives Italian companies a new chance in Libya,” he explains, referring to contracts in energy, highway construction and border security.

But what Mr Menotti calls the “dark side” of cucù is Mr Berlusconi’s pursuit of his own business interests in expanding his Fininvest media empire into untapped markets.

A subsidiary of the Gaddafi family’s investment company has taken a 10 per cent stake in Quinta Communications, a French company founded in 1990 by Mr Berlusconi and Tarak Ben Ammar, a Tunisian-born media tycoon and long-standing friend.

Media analysts believe Mr Berlusconi is looking for acquisitions in Russia and Turkey. In the latter he might help Mr Erdogan to counter a troublesome critic in Aydin Dogan, a media tycoon under pressure to sell off assets to settle its problems with the government-directed tax authorities.

And yet, Mr Menotti asks, is this so different from the seamless move made in 2005 by Gerhard Schröder – another close Putin acquaintance – from the German chancellory to a senior position in the Russian-backed Nord Stream pipeline project?

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