3 Oct 2013
Silvio Berlusconi: You can't keep a good man down
FXstreet.com (London) - Enrico Letta may have won yesterday’s skirmish, but it is difficult to see him winning a war of political attrition.
Yesterday’s vote of confidence for Italian PM Enrico Letta has gone some way to restoring some stability to Europe’s third largest economy. Italian bond yields stabilised, though still remain in worryingly high territory. The FTSE MIB gained 2.9 percent and has continued to add to gains this morning. But any idea that yesterday’s vote means an end to the potential for Silvio Berlusconi-led political disruption is wide of the mark.
The vote of confidence was called for after Berlusconi withdrew his PdL party from the coalition government, including 5 of his cabinet ministers. The former PM was then pushed into an embarrassing climb-down, backing Letta in the confidence vote when it became clear that he was going to win, even without Berlusconi’s benediction - the Senate voted 235 to 70 in favour of the government.
On Friday a Senate committee is due to vote on whether to strip the former PM of his seat following his conviction for tax fraud.
But even if Berlusconi is stripped of his seat in the senate, the 77-year old billionaire will remain one of the most powerful men in Italy, with significant control over the PdL with whom Letta governs in a Grand Coalition.
While Letta may have won on the day, with Berlusconi embarrassed, it would be a gross mistake to expect a little embarrassment to put a stop to Silvio. A man who attended G20 summit wearing a bandana.
However, while Silvio could brush off yesterday’s U-turn, he will put himself at risk if he tries the same tactic twice. Bragging, as Berlusconi did in the run up to the 2008 elections, that female politicians from the right were "more beautiful" and that "the left has no taste, even when it comes to women" loses its chutzpah when you’ve been humiliated in a confidence vote that you yourself instigated. The difference between Silvio Berlusconi the charismatic rogue and Silvio Berlusconi the lecherous septuagenarian buffoon is success. And he needs to step away from the scene of yesterday’s failure to avoid slipping further from the former to the latter.
And the question arises of whether Letta wants a vanquished Berlusconi. With Silvio still in the senate, Letta has a bogeyman for Italy’s economic worries. He can pin any problems he inherited on a man he can paint as a buffoon. But without Berlusconi as a distraction, Letta has 12.2 percent unemployment and an eye-watering 40.1 percent youth unemployment. He has a budget deficit that the IMF has predicted will come in at 3.2 percent of output this year, overshooting the government's 2.9 percent target and the European Union's 3 percent ceiling.
Until Letta comes up with a clear and credible solution to Italy’s problems, Berlusconi will remain in a position to dictate the conversation.
Yesterday’s vote of confidence for Italian PM Enrico Letta has gone some way to restoring some stability to Europe’s third largest economy. Italian bond yields stabilised, though still remain in worryingly high territory. The FTSE MIB gained 2.9 percent and has continued to add to gains this morning. But any idea that yesterday’s vote means an end to the potential for Silvio Berlusconi-led political disruption is wide of the mark.
The vote of confidence was called for after Berlusconi withdrew his PdL party from the coalition government, including 5 of his cabinet ministers. The former PM was then pushed into an embarrassing climb-down, backing Letta in the confidence vote when it became clear that he was going to win, even without Berlusconi’s benediction - the Senate voted 235 to 70 in favour of the government.
On Friday a Senate committee is due to vote on whether to strip the former PM of his seat following his conviction for tax fraud.
But even if Berlusconi is stripped of his seat in the senate, the 77-year old billionaire will remain one of the most powerful men in Italy, with significant control over the PdL with whom Letta governs in a Grand Coalition.
While Letta may have won on the day, with Berlusconi embarrassed, it would be a gross mistake to expect a little embarrassment to put a stop to Silvio. A man who attended G20 summit wearing a bandana.
However, while Silvio could brush off yesterday’s U-turn, he will put himself at risk if he tries the same tactic twice. Bragging, as Berlusconi did in the run up to the 2008 elections, that female politicians from the right were "more beautiful" and that "the left has no taste, even when it comes to women" loses its chutzpah when you’ve been humiliated in a confidence vote that you yourself instigated. The difference between Silvio Berlusconi the charismatic rogue and Silvio Berlusconi the lecherous septuagenarian buffoon is success. And he needs to step away from the scene of yesterday’s failure to avoid slipping further from the former to the latter.
And the question arises of whether Letta wants a vanquished Berlusconi. With Silvio still in the senate, Letta has a bogeyman for Italy’s economic worries. He can pin any problems he inherited on a man he can paint as a buffoon. But without Berlusconi as a distraction, Letta has 12.2 percent unemployment and an eye-watering 40.1 percent youth unemployment. He has a budget deficit that the IMF has predicted will come in at 3.2 percent of output this year, overshooting the government's 2.9 percent target and the European Union's 3 percent ceiling.
Until Letta comes up with a clear and credible solution to Italy’s problems, Berlusconi will remain in a position to dictate the conversation.