The former Italian premier, Silvio Berlusconi, has called off his political attack dogs after their threats to bring down Italy’s fragile coalition government appeared to panic the stock market and wipe €150m off the value of shares in one of his companies in just four hours.
The billionaire media mogul’s conviction for tax fraud was upheld earlier this month, as was his subsequent four-year prison sentence and ban from public office. The Senate – in which Berlusconi holds a seat – must confirm his ban from public office before it can take effect, which has meant lengthy political wrangling as his allies attempt to block the confirmation. His opponents, meanwhile, say the definitive conviction means Berlusconi’s eviction from parliament is a legal requirement.
With senior members of Berlusconi’s PDL (People of Freedom) Party – including some in ministerial positions – saying the coalition will fall without a get-out for the three-time premier, and with the centre-left refusing to countenance such a move, panic took hold of Milan’s stock exchange. Many economists have said stable government is vital to maintain the first signs of economic recovery.
The share price of Berlusconi’s Mediaset company fell over 6 per cent on Monday, at which point he called on his colleagues to stop the threats, which the centre-left premier Enrico Letta described last week as “blackmail”.
In a widely reported note to senior PDL figures, Berlusconi said: “I would ask everyone not to supply any more declarations or interviews that can be manipulated to fuel the polemic and harm internal cohesion.”
The centre-left Repubblica newspaper said that “the thud on the Stock Exchange” had convinced Berlusconi that it was time to silence his PDL colleagues, in particular the outspoken MP Daniela Santanche, who has led calls to pull the plug on the coalition.
This would not be the first time Berlusconi has taken political action to shield his business interests. Pundits have long said he entered the political arena almost two decades ago to protect his companies from left-wing politicians who wanted to dismantle them, as well as to escape prosecution for other charges.
In November 2011, Berlusconi quit his third term as premier in order, many analysts believe, to save his Mediaset mass media empire from speculators after it lost 20 per cent of value in five days in the face of the mounting sovereign debt crisis – over which he had presided.
The threat to expel Berlusconi from the Senate is not the only obstacle to the continued survival of the Letta administration.
Ministers will meet today to discuss the controversial IMU tax on main residences, which the centre-right insists must be scrapped if it is to continue supporting the government. There has been no agreement on where to find the €4bn a year it would take to abolish the tax.
The Finance Minister, Fabrizio Saccomanni, has said the country’s precarious finances cannot absorb the cost of cancelling it. Last year, Italy’s vast public debt passed the €2trn mark, making it extremely vulnerable to changes in borrowing costs.
Italy’s upper house is due to discuss expelling Berlusconi from the Senate next month. First the Senate committee for immunity and elections will discuss the issue on 9 September.
Its recommendation will then be passed to the entire upper chamber, which will vote on the expulsion. Berlusconi’s opponents have a majority in both the committee and the Senate as a whole.
Political observers note that in addition to the humiliation of being kicked out of parliament, the mogul would be more vulnerable to arrest for other suspected crimes.