Berlusconi at Bay

Silvio Berlusconi, who becomes President of the European Union on July 1 st , is a man of vision who once loved risk--and whose business bets paid off big. In the 1960's, he was the first to see that Milan, then a traditional Italian city where people walked to work, would become a modern metropolis, surrounded by American-style suburbs. So his fortune began in real estate development.

Fifteen years later, Signor Berlusoni understood that the Italian state's monopoly of television would not survive and jump-started what became Italy's main privately owned media group. But you don't win in TV and the real estate business without the right political connections. On both occasions, Berlusconi outwitted his competitors by siding with the Socialists, at the time the rising stars of Italian political life. His long association with Bettino Craxi, Milan's most influential politician in the 1970's and Italy's prime minister through much of the 1980's, started early.

On the other hand, political connections do not make a politician. Indeed, the jump from business into politics was probably not Berlusconi's own preference. By the 1990's, his media group was in trouble, weakened by excessive diversification (the decision to enter the retail-distribution business almost destroyed the group). Almost at the same time, ex-premier Craxi fled to Tunisia, chased there by the Italian courts at the height of the mani pulite (clean hands) investigation into the vast network of corruption known as Tangentopoli (Bribesville).

Craxi's flight and exile left Berlusconi feeling lost--and without the reliable political backing that he needed. So he decided that he needed to become his own political sponsor. As has happened frequently in Italian history, Berlusconi's decision to form a new political party, Forza Italia , just a few months before the 1994 general election paid off handsomely.