Europe’s Unending Berlusconi Problem

Silvio Berlusconi, Italy’s three-time prime minister and the country’s dominant politician for two decades, has now been convicted and sentenced to prison. But few people in Italy – or in Europe – believe that Berlusconi will fade from Italian, and European, politics anytime soon.

LONDON – Silvio Berlusconi, Italy’s three-time prime minister and the country’s dominant politician for two decades, has now been convicted and sentenced to four years in prison – a sentence since reduced to one year.  But few people in Italy – or in Europe – believe that Berlusconi will fade from Italian, or European, politics anytime soon. Just a few days ago, he declared his intention to remain involved in politics, though not to run for prime minister a fourth time.

Whatever role Berlusconi chooses to play, it is unlikely to be a marginal one. He may not wish to be king again, but he certainly can be a kingmaker, owing to his control of Mediaset, Italy’s largest media group. And, given his abysmal popularity ratings, he may decide to play the wild card, embrace a euro-skeptic and anti-government stance, and try to bring down Prime Minister Mario Monti’s technocratic administration.

Monti’s government took over from Berlusconi in November 2011, arriving with a clear mandate, and full parliamentary support, to implement the measures needed to restore market confidence and reassure Italy’s eurozone partners and the International Monetary Fund that the country was not going down the path taken by Greece. At the time of the G-20 summit in Cannes that month, Italy – and Europe – was dangerously close to collapse, with Berlusconi’s government deeply divided about the fiscal measures needed to bring down the country’s debt-service costs. Domestic political deadlock, and Berlusconi’s inability to engage with Germany and France resulted in spiraling refinancing costs, with the spread relative to German bunds consistently over 500 basis points between July and November 2011.

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