How Berlusconi's Nazi camp gaffe demonstrates a conflict of interest

They thought they'd seen it all. But the thing about having a man like Silvio Berlusconi as Prime Minister is that you never know what's coming next.

Yesterday, the day after Mr Berlusconi branded a German Socialist MEP worthy to play the part of a guard in a movie about a concentration camp, Italy's press, which rarely agrees about anything, were suddenly singing from the same hymn sheet: Mr Berlusconi's "ironical joke" was a calamity; the European Parliament had never seen anything like it; enormous opportunities had been needlessly thrown away.

"A terrible beginning" bemoaned Corriere della Sera, Italy's best-selling and most authoritative paper. "The European presidency could not have got off to a worse start ... What happened at Strasbourg underlines for the umpteenth time questions that have afflicted the centre-right government from the beginning." In particular, the dilettantism of this billionaire who has been in politics little more than a decade, which prevented him from seeing that "to call an opponent on the international scene a Nazi would be simply ruinous".

La Repubblica, the left-leaning daily that has been at war with Mr Berlusconi for years, denied that there was "even a trace of satisfaction among Berlusconi's political adversaries" at the shambles. Instead there was "a sense of dismay for a sacrilege that has humiliated Europe and that risks wounding Italy's image irreparably."

La Repubblica's editor, Ezio Mauro, identified in Mr Berlusconi's gaffe evidence that Mr Berlusconi is out of control. "Every day his drift becomes more tragic and unstoppable," he wrote on the paper's front page, "and yesterday it struck the rock of Europe." Why? The quality of dilettantism, "that many Italians like", "muscles in the place of competence, political and moral competence" to do anything about "the glaring conflict of interest of which [Berlusconi] is both prisoner and beneficiary."

The conflict of interest between Berlusconi the Prime Minister and Berlusconi the billionaire media magnate was glaring enough even in mid-joke: the concentration camp film that Mr Berlusconi mentioned is in fact complete, directed by one Egidio Eronico. Next Monday, Medusa, Mr Berlusconi's film distribution company, will decide whether to buy the distribution rights.

La Stampa, the conservative Turin newspaper which often gives Mr Berlusconi the benefit of the doubt, was upset too. "A joke can ruin everything," said Pierluigi Battista on the front page. Especially a joke "of dubious significance and such contorted irony as to make it indecipherable".

In fact there is an explanation for why Mr Berlusconi came up with that crude remark at that particular moment, and here it is.

He has persuaded himself that he is the victim of a sustained and vicious conspiracy in Italy between leftist politicians, prosecutors and judges, determined to finish him off as punishment for his massive success and popularity. The conspirators include the leftists who infest the Italian media, and they are implacable.

Finally, at the last moment before the Italian presidency, he broke free of them, thanks to his immunity Bill - free at last from the prison camp that Italy has become. He tunnelled out, emerging into the glory and gratification of the European presidency. But then, in Strasbourg, under fire from Martin Schultz, who launched several well-guided missiles, he made an appalling discovery: he was merely inside a bigger, uglier prison camp than before, a camp as big as Europe. And Mr Schultz was his vicious prison guard! Psychologically it's all understandable.

That is the most charitable explanation of why Mr Berlusconi said what he said: he couldn't help himself. But even close colleagues, such as the Deputy Prime Minister, Gianfranco Fini, were not bothering to be charitable yesterday.

Because the remark, nasty enough in plain English, was considerably worse in Italian.

The word "capo" was translated in the British press as "commandant" of a concentration camp, but in the Italian media it was more faithfully reported as "kapo", with the stress on the second syllable, which means something entirely different. Probably derived from the German "Kameraden Polizie", it refers to Jewish prisoners in the camps who were picked by the Nazis to keep their fellow prisoners in line, and who were often noted for their cruelty. In a single crack, Mr Berlusconi managed to make light of the Holocaust and deeply offend both Germans and Jews, as well as Mr Schultz personally.

Still grinning broadly, betraying a frightening unawareness of what he had done, Mr Berlusconi went on to gloss the remark with the observation: "For years, comical stories about the Holocaust have been doing the rounds in Italy, because Italians know how to laugh even at something as tragic as that." When the commentators spoke of "irreparable damage to Italy's image", they were on to something.

Throw in the fact that Mr Berlusconi is in government with the Alleanza Nazionale (AN), historical successor to Mussolini's Fascists, and it becomes clear that Mr Berlusconi was not so much treading on thin ice as plummeting straight through it. Mr Fini, leader of the AN as well as Deputy Prime Minister, who sat next to Mr Berlusconi, palpably embarrassed, throughout the performance, was quick afterwards to say his boss should not have said it and should apologise. There were strengthening rumours yesterday that Mr Fini, who has long striven to bring his party into the respectable mainstream, may leave the government.

The spokesman of Rome's Jewish community, Riccardo Pacifici, described the remark as "an offence against the Italians who are rightly indignant about those few imbeciles who tell jocular stories about the Holocaust". Mr Pacifici went on to request the Prime Minister to "find a way to explain which comical stories he is referring to, because otherwise this would really be a joke in the worst taste".

Mr Pacifici and Mr Berlusconi's journalistic critics had put their finger on something disturbing within the culture of this government: a thick seam of vulgarity and xenophobia, intensified by increasing evidence that Mr Berlusconi himself is paranoid; "an uncontrollable escalation," La Repubblica termed it, "of wounded megalomania."

Umberto Bossi, the loudmouthed leader of the Northern League, Mr Berlusconi's other principal political ally, with whom he dines every Monday, and who said the other week that the Italian Navy should fire its cannon at the boats of illegal immigrants, is the normal conduit of these qualities. But Mr Berlusconi demonstrated in Strasbourg that he is on the same wavelength.

Yesterday, after sleeping on it, Mr Berlusconi had reached the only satisfactory explanation: the attack of Mr Schultz was a plot cooked up by the leftists in Italy. The Italian prison camp and the European prison camp were one and the same.

WHAT THE ITALIAN MEDIA SAID

Rete 4: owned by Mr Berlusconi's company Mediaset. Evening news bulletin - Mr Berlusconi is second item. Over shots of Martin Schultz gesticulating - "See the manner in which he behaves towards the Prime Minister." Mr Berlusconi: "My remark was an ironic joke." No reference to the demand for an apology.

Rai 3: state channel controlled by opponents of Mr Berlusconi. Evening news bulletin - Mr Berlusconi is top story. Opposition politician: "The problem now is to restore credibility in the Italian presidency. Berlusconi must apologise." A German MP says: "I'm sure Prime Minister Berlusconi is intelligent enough to to find a way out of this mess."

Il Giornale: daily owned by Mr Berlusconi's brother. Page 2 - Former president Francesco Cossiga: "The Fourth Reich attacked us because we are an obstacle to Franco-German hegemony."

L'Unita: communist-backed daily. "Any hope that Italy might appear to be a normal country is already over."

La Repubblica: owned by Carlo de Benedetti, Mr Berlusconi's business rival. "The credibility of the Italian presidency has hit rock bottom."

Corriere della Sera. "Politically it is a grave mistake not to have lifted a finger to resolve his conflicts of interest ... it's pure and simple suicide."

La Stampa. "A joke can ruin everything ... thanks to this joke, a speech [by Mr Berlusconi] judged by many to be judicious, balanced and promising went to waste."