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The Economic Consequences of Silvio Berlusconi

MILAN – Silvio Berlusconi has survived a confidence vote, but his government is virtually dead. One cannot rule a country with so scant a majority. Not for long.  

The one important decision that this, Berlusconi’s fourth government, ever bothered to take was a decision not to decide. Two years ago, when financial crisis shook the world, Berlusconi’s choice was to avoid any policy intervention to counteract the Great Recession. This contributed to the deepest fall in output in Italy’s postwar history, with a cumulative 6.5% decline in GDP. Within the G-20, only Japan did worse.