Vai via Berlusconi 13th novembre 2011

Vai via Berlusconi 13th novembre 2011





I thought it would never happen, but it has! Yesterday evening "Il Cavaliere" - "The Knight" Silvio Berlusconi resigned as Prime Minister of Italy. In July, driving through the outskirts of Naples I saw a sheet hung from a tower block saying "Berlusconi Vai Via" which means "Berlusconi go away" reflecting the feeling of the people. However, he hung on and on. Political issues and personal issues never seemed to damage him, the accusations of being mafioso or the numerous gaffes with senior foreign political figures were water off a duck's back. He had numerous votes of confidence and he won them all. And yet, yesterday enough was enough, as the country was hit where it really hurts - it's wallet.  A few days ago, with Italy teetering on the brink of following Greece and Spain into financial ruin, Berlusconi offered to resign if his austerity measures were passed. They got through the lower house the other day and got through the upper house yesterday. So, he took his last address in parliament yesterday and left to rapturous cheering from his political mules, and to jeers from the public waiting for him as he took his last drive, inspiring instant street parties.
Speaking of mules though, Lucia Annunziata - the former director of RAI - the Italian media network said  "beware the dead donkey! He looks dead and then he kicks you!"
The fear is of "contagion". OK - Greece's economy is FUBARed - everybody knows that, however it is tolerable. If Italy's economy goes down it is a whole different kettle of fish. Italy's economy is massive, the debt is more than three times the debt of Greece, Spain, Portugal and Ireland combined. If Italy goes down, France may follow as they hold a significant portion of Italian debt. The Italian economy is the third largest in the Eurozone. The debt currently stands at 118% GDP. However, drilling down the Italian people are not overtroubled with mortgages and the Italians generally have not massive unstable debts. Part of this is due to the family way of life of the Italians, houses are passed down through families so they do not overburden themselves too much.

So why is Italy in trouble now? The reason is because its economy is so weak. Italy is plagued by poor regulation, vested business interests, an ageing population, and weak investment, all of which have conspired to limit the country's ability to increase production. The country has averaged an abysmal 0.75% annual economic growth rate over the past 15 years. That is much lower than the rate of interest it pays on its debts. And this creates a risk that the government's debt load could grow more quickly than the Italian economy's capacity to support it. In the past, this risk has not materialised, thanks to Italy's relatively high inflation rate, which has steadily pushed up the government's tax revenues. But now the outlook is much more grim. Like other southern European economies, Italian wage levels rose too quickly during the good years, and left Italy uncompetitive versus Germany and other northern economies within the eurozone. As crazy as this sounds to me - Italian wages are shocking compared to most of the other countries in Europe I am familiar with (UK, Germany, Switzerland), but now they are going to be frozen. Foooook. However, Italy is stuck in a period of low growth and high inflation. However, Italy needs to recover the debts but Italian binds borrowing is now at terrible rates. To borrow money for one year Italy has to pay 6.05% where by contrast Germany must pay only 0.25%. This means that there is a risk of contagion that may spiral downwards. Greece was offered a payout last week, the Greek PM then took the option to a referendum in Greece, which shocked the rest of the Eurozone. This week the Greek PM stood down. However, the upshot is that there is a lot of money being put into stabilising the greek debt, which leaves money short for Italian debt to stabilise.

A review of Berlusconi's career


http://en.wikipedia.org/wiki/Silvio_Berlusconi

Career: Berlusconi is Italy's richest man, owner of RAI media corporation, Inter Milan, so controls a lot of what is written about him. Born in Milan in 1936 he rode the rollercoaster of the times when Italian become a huge superpower moving to the 5th largest economy in the world in the 1980s. At school he wrote essays for classmates, getting paid for it. He played double bass and sung in a band whilst at university and became a singer on a cruise ship after leaving university. He set up a tv station and then started a construction company that had a massive boom creating an area in Milan called Milan Due earning him his first fortune.

Politics: Amazingly he has had a successful political career for 17 years. He started a party called "Forza Italia" - "Go Italy" - named after a Milan football chant in the 1990s and at that time it was a breath of fresh air to have this passionate, character in politics. He has held PM office for the longest period post-war. In fact, since Mussolini's rule was actually a dictatorship, so in fact Berlusconi is the country's longest service democratic PM.

Scandal: He has been subject to 23 judicial investigations, mostly for corruption. He has been accused of having sex with minors, sex with prostitutes, but the worst accusation, from and Italian perspective, was having sex with an under-age Moroccan prostitute - Ruby. Noone seems to be able to tell me if prostitution is legal, but certainly this 17 year old working as a prostitute seemed to really reverberate around the country. His wife filed for divorce after he started surrounding himself with leggy women, even giving some of them positions of seniority in his political party, despite absence of qualifications. In some quarters he is known as "The Sultan" for his behaviour. His "Bunge Bunga" parties/orgies are legendary.
http://en.wikipedia.org/wiki/Bunga_bunga
And there were recent items - how he boasted of having sex with 8 women in a night and how he was disappointed to turn another 3 away (http://www.newser.com/story/128802/berlusconi-brags-of-8-women-in-a-night.html), and of course, the phrase "e' una culona inchiavibile" which I discussed elsewhere.
http://www.telegraph.co.uk/news/picturegalleries/worldnews/8286270/Silvio-Berlusconis-women.html
The guy is clearly a legend, but hated by women (who he is not sleeping with) and men whom are not financed by him.

The bunga bunga has been translated into a website "bungle bungle" which lists all the gaffes that Berlusconi has made.
http://www.bungle.it/

One that stands out for me is the one that happened whilst he was visiting L'Aquila after the devastating earthquake in 2009. He said that the homeless should view it as a camping trip and enjoy it and he asked the councilor "Can I fondle you?"

And then there are the links with the Mafia. There were payments to Cosa Nostra ("our thing" what the mafiosi call their organisation) that were discovered.

Mangano was hired to run his stables but later was jailed for drug-trafficking and murder. In fact, it is suspected that Berlusconi was a key link between the north and the south - the Mafiosi controlling the mafia-corrupted south, Berlusconi controlling the north and helping unite the two.

In 2009 he was attacked by a man armed with a statue of Milan cathedral. He got him in the face and did some considerable damage. Fairplay to the old boy, despite being bundled into the car by his security and with blood all over his face, and I think a tooth or two missing - he got back out of the car and showed to the public that he was fine.

On top of that, he wears high heels to make himself look taller, has hair transplants, and has had numerous facelifts. Well - the man is 75 after all! And he has a pacemaker.

  

However, despite all this he is still absolutely loved. The potency of his aura was perhaps unwittingly revealed by the conservative newspaper editor Vittorio Feltri. Speaking on a national TV talk show on Monday, Feltri decried those asking for Berlusconi to step aside. "If you were in England, you wouldn't ask the Queen to step aside, would you?" Feltri burst out angrily. However, yesterday the leader of the democratic party called it "a day of liberation."

Next steps: So - who is next? Unfortunately Italy has a reputation for corrupt PM's even post-war. One had to flee to Tunisia to see out his days, hiding from financial misdoings. High on the agenda is "Super Mario" - Mario Monti. Disappointingly he is similarly old - born in 1943 so 68 years old, but he is a tough and economically wise head. He studied at Yale under Tobin - a leading economics thinker, inventor of the "Robin Hood tax" and has been an EU Commissioner. But it was in his second term at the commission (1999-2004) that he earned the nickname "Super Mario" for the way he took on vested interests. He blocked a merger between General Electric and Honeywell, and battled Germany's powerful regional banks.

He also launched an anti-trust case against Microsoft for its bundling of audio and video software. In 2004, the EU fined Microsoft 497m euros (£325m) for what it said was abuse of its dominant marketposition. He is well esteemed throughout and could be the man for the job. He needs to work miracles for the Italian government and people, and also for my job and salary! The austerity package contains the following: An increase in VAT, from 20% to 21%A freeze on public-sector salaries until 2014The retirement age for women in the private sector will gradually rise, from 60 in 2014 until it reaches 65 in 2026, the same age as for menMeasures to fight tax evasion will be strengthened, including a limit of 2,500 euros on cash transactionsThere will be a special tax on the energy sector.

So hopefully none of them will affect me immediately, but I can see a tough few months and years ahead for a lot of people. I hesitate to say it but - Forza Italia!