ROME: Italy’s fragile coalition government, already struggling to contain deep divisions over tax and economic policy, woke up to a whole set of new problems yesterday after Silvio Berlusconi’s conviction for tax fraud was upheld by the Supreme Court.
Just three months after centre-left Prime Minister Enrico Letta took office at the head of an uneasy alliance with Berlusconi’s People of Freedom party (PDL), Italy, the eurozone’s third largest economy, is again mired in uncertainty.
Letta repeated yesterday that Italy must have a stable government, saying the last thing it needs is to be worn down by partisan battles. But everything hangs on the unpredictable reaction of Berlusconi, who faces the threat of a year under house arrest or in community service as well as losing his seat in parliament.
The 76-year-old billionaire and his supporters have reacted angrily to his conviction and prison term, the first definitive sentence he has received in dozens of trials during his two decades in politics, and indicated justice reform was the price of preserving the coalition.
“If there is no reform of the justice system, we are ready for new elections,” he told PDL lawmakers, according to a source at the meeting. Officials also said that senior party members may ask President Giorgio Napolitano to pardon Berlusconi — an idea the president rejected last month and could resign from the government if rebuffed.
How imminent a threat such talk may pose remains uncertain however with Berlusconi apparently cautious about rushing into action before he is ready.
“Berlusconi said not to take any hasty decisions and to think of the interests of the country,” PDL Infrastructure Minister Maurizio Lupi told reporters. While Berlusconi is unlikely to spend any time in jail due to his age, the verdict was an unprecedented blow and a Senate vote on expelling him from parliament could come in September.
He has declared he will continue his political activities under the “Forza Italia” (Go Italy!) name of his first party, with speculation growing that his daughter Marina may succeed him as party leader.
The upheaval means the already dim prospects of significant reforms to revive Italy’s stagnant economy and cut its massive debt have receded further.
Agreement over thorny issues such as privatisations due in the autumn or the much-disputed IMU property tax which Berlusconi wants to scrap but which would blow a hole in already strained public finances will be difficult.
“It depends on the PDL,” deputy Economy Minister Stefano Fassina, from Letta’s centre-left Democratic Party (PD) said.
“It’s not something which can be settled in the next few hours but over the next few weeks, we’ll have to settle the IMU issue and on an issue like this, it can’t just be about Berlusconi’s personal interests,” he said.
Problems just as serious could also come from Fassina’s own fractious camp, with many in the centre-left unhappy at the prospect of remaining in alliance with a convicted tax evader. To add to the problems facing Letta, Matteo Renzi, the ambitious young mayor of Florence, is widely expected to mount a bid to lead the party.
Letta himself said that the situation was “politically very delicate” and he called on all sides to show responsibility in the interests of the country. But he acknowledged that there were limits to what could be accepted.
“I don’t consider that continuing at any cost is necessarily in the interests of the country,” he said.
With Italy’s stagnant economy showing the first faint signs of improvement after two years of recession, it can ill afford months of debilitating stalemate.
Reuters
