Leading article: If he wants to save Italy, Mr Berlusconi should go

 

Monday 07 November 2011 01:00
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As the political career of the Greek Prime Minister draws to its inevitable close, pressure is growing on his Italian counterpart to step down as well. This pressure comes from home and abroad. At home, Silvio Berlusconi faces another vote of confidence in parliament tomorrow. He may well scrape through again – he has, after all, won at least 20 such confidence votes in the past – but the closeness of the vote will underline what a divisive and distrusted leader he has become.

Meanwhile, at the recent G20 summit in Cannes, he cut a forlorn, isolated figure, visibly shunned by many of his colleagues. In the eyes of the German Chancellor, Angela Merkel, and many of the other international leaders who were present, Mr Berlusconi is not only a tawdry figure, his name sullied by association with countless sex scandals, but in some ways a more culpable political leader than George Papandreou, who only took up the reins in Athens in autumn 2009 and arguably inherited an impossible situation.

Mr Berlusconi can make no such mitigating plea. He has been running Italy for most of the past two decades. Italy's economic stagnation since the 1990s and the steady growth of what is now a frightening quantity of debt during the same period is his responsibility. It is both the size of the debt itself, now standing at €1.9trn, as well as concerns that Italy may not be able to continue to meet increasingly steep interest rates, that raise the nightmarish possibility of the third-largest economy in the eurozone defaulting.

That possibility may sound far-fetched. The problem is that it is no longer being discounted entirely, and if it does happen Greece's problems will look trifling by comparison; hence the desperate concern in Berlin and Paris that Italy should start to put its house in order. In Paris, above all, because France has been a major purchaser of Italian debt, so that an Italian default would deal a particularly catastrophic blow to the French banking system.

Mr Berlusconi seems curiously unaware of the storm clouds gathering over his head. The familiar smile remains in place and the jokey manner is unchanged. He does not look ready to throw in the towel. Bowing to foreign pressure at Cannes, he agreed to call in IMF experts to monitor his government's debt reduction plans. This was an embarrassing concession because it suggested that the Prime Minister had recognised that he could not be trusted to oversee this programme without someone else looking over his shoulder. But beyond that he seems to want to see out his term, which means staying on until 2013.

In his favour Mr Berlusconi can argue that his long term in office has given Italy an unprecedented degree of political stability, a welcome change from the revolving-door governments of the 1980s. He might also say that running complex coalition governments in a country as divided as Italy is never easy. Finally he might also say that Italy has always kept up interest payments on its debt in the past, so the recent speculation over his country's creditworthiness is unwarranted. Unlike Greece, Italy is still solvent in other words.

This is all true. Italy's economic position, unlike Greece's, is not hopeless. But Mr Berlusconi should still go for the simple reason that his continued presence at the head of the government is doing more harm than good. Almost no one in Italy or outside believes he has the skill, will or credibility to push through the kind of harsh and unpopular measures that Italy needs to take if confidence in its solvency is not to decline further. Under a new leader Italy could escape from falling into the same trap as Greece. Under Mr Berlusconi, the omens are less good.

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