Golden boy loses his shine: Silvio Berlusconi is finding that his recipe for business success can leave a nasty taste in the political arena

THAT SLY old fox of Italian politics, Giulio Andreotti, was fond of saying (to explain his apparent immortality): 'Power only wears out those who don't have it.'

For the man who stepped into the fox's shoes, the old adage has proved, cruelly, the reverse of the truth.

Little more than 100 days after media tycoon Silvio Berlusconi swept into office, the golden aura surrounding him is fading before the eyes of the Italian people. Damaged by a bone-headed confrontation with anti-corruption magistrates, and entangled in the conflict of interest between his commercial and political affairs, Mr Berlusconi has woken up to the harsh realities of politics beyond the television studio.

At one stage it looked as if his government would fall. If he has won a temporary reprieve, it is largely because elections would suit no one at this fragile stage in Italy's public life.

When Mr Berlusconi and his right-wing allies won their landslide victory at the end of March, the 'merchant prince' seemed to be lord of all he surveyed. Backed by a pounds 4bn business empire, including television stations and publishing interests, the power concentrated in Mr Berlusconi's hands was enormous. He promised that he would create a new Italy, an Italy 'to dream about'.

The product was brilliantly sold. Mr Berlusconi's suave but straightforward style, the impeccable tan (applied, cynics said, from a bottle for the cameras) and the ready smile were a welcome change from the weasel words and decrepit air of the professional politicians. What went wrong?

'Berlusconi is first and foremost a businessman. He ran his empire by force of personality and diktat. That still worked well for him when he threw his resources into the electoral campaign,' says a financial analyst who has followed the fortunes of Mr Berlusconi's Fininvest group since its beginning. 'His problems started once he had to govern. He is only just realising that you can't run a country like a company, especially a country like Italy, where consensus and compromise have always been the tradition.'

Mr Berlusconi's first mistake, and the root of all others, was to brush aside demands that he distance himself formally from Fininvest when he took power. He gave up day-to-day running of the group when he entered politics, but the man to whom he handed the reins, Fedele Consalonieri, was an old and trusted intimate.

Rumours persisted that the Prime Minister chaired a meeting of top Fininvest managers every Sunday at his magnificent villa in Milan. Not for Mr Berlusconi an American-style blind trust. Italian companies were different, he said. Besides, he'd built his empire over 30 years, and he couldn't sever himself from it just like that. Political commentators pointed out the anomaly, in a Western democracy, of a prime minister owning half the country's television stations himself and controlling the other half - those of the state broadcasting corporation - through his political office.

The tycoon's coalition partners, too, were unhappy, particularly the populist Northern League, which was elected on a platform of 'clean government'. Besides, they could see at first hand how access to friendly media was boosting the fortunes of the Prime Minister's Forza Italia party at their expense. Mr Berlusconi swept all objections aside with pious assurances that he himself would be the guarantor of 'fair play'.

The grumblings had all but died down when Mr Berlusconi scored his first, extraordinary own goal. The confrontation with the country's 'clean hands' investigators laid him open to corrosive charges of self-interest. When on Thursday 14 July he issued an emergency decree removing the power of magistrates to order preventive detention of suspects, the public outcry caught the Prime Minister off guard. The only man in Italy more popular than himself, the anti- graft judge and secular saint, Antonio Di Pietro, threatened to resign.

Mr Berlusconi was furious. One of his television stations replaced a scheduled film with another telling the tragic tale of a man unjustly jailed. Another ran an interview in which the Prime Minister defended his decision.

But the magic formula no longer worked. As his own coalition allies lined up against him, Mr Berlusconi was forced into a humiliating U-turn. Why, conspiracy theorists asked, had he tried to use an emergency power, effectively bypassing parliament? Were the judges drawing too close to the Prime Minister's business affairs?

Berlusconi's ordeal had just begun. Days later, Judge Di Pietro's team announced the arrest of a Fininvest executive on charges of bribing finance police to overlook massive tax fraud. The Prime Minister's younger brother, Paolo, was implicated in the case. When details emerged of a meeting at Mr Berlusconi's villa between the Prime Minister, members of his government - all of them ex-Fininvest employees - and the defence lawyers for Paolo and the other company executive, all hell broke loose.

On Friday Mr Berlusconi bowed again to the necessities of public life and agreed to set up the sort of business trust that he had resisted for so long. He has bought himself some time but how much more? 'In a matter of days Berlusconi managed to demolish his political image, put the delicate balance of his coalition under extreme pressure and alienate his own supporters. At this point I'm not sure that his government will see out the year,' said Harry Richter, the former president of the British Chamber of Commerce in Milan.

Political inexperience or sheer hubris alone do not explain the mess into which the golden boy has descended. The answer lies in the great, smoothly humming Milanese hive that is Fininvest.

Imagine the sort of corporate loyalty expected, and given, in American companies. Add to that the sheer force of Mr Ber lusconi's personality and his generosity with high achievers (he reputedly invited the top sales staff of his publishing company Mondadori for regular dinners, and would present each guest with a pounds 500 watch at the end of the evening).

Like another business tycoon-cum-politician, Ross Perot, Mr Berlusconi surrounded himself with aides drawn from the ranks of his own employees. Unlike Mr Perot, Mr Berlusconi made it to the top of the political tree. It seems that among his courtiers - most of them as politically inexperienced as him - no one was able to tell the tycoon what he could or could not get away with electorally.

As the ancient Romans used to consult chicken entrails, Mr Berlusconi uses opinion polls produced by his own PR company, Diakron, to take the pulse of the nation before making decisions. At the beginning of July they showed an approval rating of more than 70 per cent, suggesting he could win the public over to almost anything. They turned out to be wrong. Now his popularity stands at a little over 50 per cent and falling. If Mr Berlusconi is not to be worn out by power, he will have to learn to invest his political capital more wisely.

(Photograph omitted)

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