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Scandals lead Italy into deeper crisis

February 15, 2011

By Guy Dinmore in Rome, published: February 15 2011

It is not the first time that Silvio Berlusconi finds himself in conflict with Italy’s judiciary. But the tawdry nature of the latest accusations involving juvenile prostitution has polarised the country while financial markets look on with increasing alarm at a paralysed government.

Mr Berlusconi could respond in different ways: he could defy what he claims are “communist” magistrates determined to carry out a coup against him, or he could call early elections.

Either way, Italy faces a prolonged period of political uncertainty.

Polls show Italians fiercely divided, with many accepting the prime minister’s denunciation of an out-of-control judiciary that taps the phones of innocent people, spies on their private lives like former East Germany’s Stasi secret police, then leaks the sordid tittle-tattle to a leftwing-dominated press to devour.

“This is judicial savagery,” complained Francesco Storace, leader of the neo-fascist La Destra party and an ally of Mr Berlusconi.

“Criminals are free, and Milan investigates between the bedsheets.”

On the other hand, hundreds of thousands of Italians mobilised by feminist campaigners rallied against the government on Sunday in the largest outpouring of public discontent since Mr Berlusconi’s third election victory in 2008.

The invective-laden debates and biased reporting on television – much of it controlled by Mr Berlusconi in his dual capacity as prime minister and billionaire media baron – serve to shore up his core public support.

Opinion polls indicate his centre-right People of Liberty party holds a lead, albeit much reduced, over opposition Democrats.

PARTYING LIFESTYLE OF CHARISMATIC LEADER

April 2009: Reports that Silvio Berlusconi attended the 18th birthday party of Noemi Letizia, an aspiring showgirl who calls him “daddy”
May 2009: Mr Berlusconi’s second wife sues for divorce, describing her husband as “the dragon
to whom virgins offer themselves for success and notoriety”
June 2009: An entrepreneur claims he procured high-class prostitutes for parties in Mr Berlusconi’s homes in Rome and Sardinia

Oct 2010: Reports Karima El Mahroug, or “Ruby Heartbreaker”, was released by police in Milan following
a call from Mr Berlusconi, who claimed she was the niece of Egypt’s former president Hosni Mubarak
Dec 2010: Mr Berlusconi’s ruling coalition narrowly survives a no-confidence vote
Jan 13, 2011: Supreme court partially vetoes a law giving Mr Berlusconi blanket immunity from prosecution
Jan 14: Mr Berlusconi under investigation by a Milan court for alleged abuse of office and paying for sex with an underage prostitute
Feb 15: Judge orders Mr Berlusconi to stand trial

Nonetheless, Mr Berlusconi is heading into uncharted waters.

Although he has vowed repeatedly to fight on even though his government holds the slimmest of majorities in parliament, analysts say he could decide to go back to the electorate before he risks losing control of events.

The influential Catholic clergy, which would still prefer a scandal-ridden centre-right government to a leftwing alternative, has said little of “Rubygate”, as Italy has come to call the latest investigation into Mr Berlusconi’s relations with suspected prostitutes. But under grassroots pressure to speak out, Italy’s bishops would find their silence hard to maintain during a protracted trial in which prosecutors say they have evidence of Mr Berlusconi hosting a “significant” number of prostitutes.

Pro-church parliamentarians would also see their loyalty to Mr Berlusconi tested.

“This could be a turning point for him,” commented Andrea Romano, head of the Italia Future think-tank which is critical of the Berlusconi government. “But it could also entrench him in his position of playing the victim.”

Italy’s weakness is not just the fragmented nature of the centre-left opposition, with its unstable mix of ex-communists, social democrats and former Christian Democrats, but the inability of the centre-right to find an alternative leader after 17 years of Mr Berlusconi, who will turn 75 this year but has still not identified his preferred successor.

Italo Bocchino, who with 30 “rebels” split with the prime minister last year, says Italy is in its “post-Berlusconi” phase, but he also concedes the arch-survivor might see out the remaining two years of his term.

“They are defending a system they are part of. Ministers were put into politics by him and their destiny is bound to him,” Mr Bocchino said, commenting on the resilience of Mr Berlusconi’s party.

One key exception who stands apart is Giulio Tremonti, Italy’s abrasive finance minister who owes as much of his political support to the hardline Northern League, a key coalition ally, as to Mr Berlusconi.

Polls show Mr Tremonti as the cabinet’s most credible minister, and in the current crisis where he has fought to keep public debts and deficit under control, he would also have the support of the business community and elements of the opposition as an alternative leader of the centre-right.

It did not escape notice that news of Mr Berlusconi’s pending trial broke just as the latest official data showed Italy’s economy virtually stagnating in the last quarter of 2010.

Gross domestic product growth in 2010 as a whole came in at 1.1 per cent after falling 5.1 per cent in 2009.

Public sector debt grew 4.3 per cent to more than €1,800bn ($2,430bn) and is projected to exceed 120 per cent of GDP.

While still manageable and bond auctions showing Italy can refinance but with rising interest rates, analysts worry that Mr Berlusconi’s crisis will lead to prolonged political stalemate.

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