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Italy Faces an Economic Nightmare
Many indicators say Berlusconi, Italy's prime minister, is leaving his country a difficult legacy
Raffaele Mastrolonardo (raffo)     Email Article  Print Article 
Published 2005-05-21 15:25 (KST)   
ROME (Italy) -- Three pieces of bad economic news in six days are hard for many prime ministers to take. It is even harder if you are a battered premier who was forced to briefly resign last month after a poor performance by your coalition in regional elections. But if your name is Silvio Berlusconi and you were elected after promising Italians a miracle, it is perhaps too much to absorb.

Let's recall what happened. On May 12 preliminary data released by the statistics office ISTAT said Italy's gross domestic product (GDP) shrank 0.5 percent in the first quarter of 2005. That makes two quarters in a row, since Italian GDP shrank by 0.4 percent in the fourth quarter of 2004.

On May 17 Domenico Siniscalco, Italy's economy minister, says the government is ready to cut the country's 2005 economic growth, adding that the deficit could violate European Union limits and implicitly admitting government's forecasts were overly optimistic.

The next day, the OECD publishes its latest economic survey of Italy asking for "further structural measures" in order to "reach budget targets in 2005." The organization "projects further falls in 2005 and 2006 on the basis of announced policy measures, with the public-sector deficit exceeding 3 percent of GDP in 2005, more so in 2006."

All this news combines to look like a KO punch for a billionaire who four years ago gained the country's approval by promising a "new Italian miracle" that has yet to materialize. Berlusconi, who according to Forbes is the world's 25th richest man, has a degree of control over six of Italy's seven main television channels, which includes the country's main commercial broadcaster, Mediaset, and RAI, the state broadcaster.

Over the years the premier-tycoon has used his media empire to seduce the public and persuade them of the goodness of his actions. But now the honeymoon seems to be over. Italians are asking themselves if they made the right choice back in 2001.

Antonio Tappi, consultant for Italy's Department for Public Administration, has already changed his mind. "When (Berlusconi) was appointed I was definitely hopeful. I thought something new could come out from an outsider, a businessman. Now I think he has been even worse than traditional politicians and I am wondering if I am going to vote for him again. Perhaps, I won't vote at all."

That's what many former Berlusconi supporters did last April in the regional elections when the prime minister's conservative coalition lost in 12 regions out of 14 and Forza Italia, his party, took just 18 percent of the votes, compared with roughly 30 percent in national elections in 2001.

A factor in this shocking result was the decision taken by many potential right-wing voters not to go to the polls. Will the same thing happen in the next general elections to be held in October 2005 or June 2006?

"What is sure is that if (elections) were to take place tomorrow Mr. Berlusconi would not have a single chance to win," says Mauro Barisione, a political scientist who teaches at the University of Milan. "That's what every poll and analysis of recent electoral fluxes indicate."

The situation doesn't seem likely to change any time soon: "The Italian electorate," says Barisione, "has been following medium-long term cycles for years now. The current trend is favorable to the center-left coalition and, most important, opposed to the government in charge. Six months or a year is too short a period for a change such as the one that would be necessary to confirm the prime minister in power."

Berlusconi's standard defense for Italy's poor performances points to the general economic weakness of the euro zone. But even by these (low) European standards, Italy's economy fares badly. While Italy shrank 0.5 percent in the first quarter of 2005, the 12-country euro zone economy expanded by 0.5 percent in the first quarter. In 2004, the Italian economy grew by 1.2 percent compared with 2 percent in the 12-member currency area. Not surprisingly, the Economist, a prominent British magazine, called Italy "the real sick man of Europe" in its last issue.

Besides these numbers, the country's bad economic situation has severely hit ordinary citizens and workers. Savino Pezzotta, secretary of CISL, a union that in 2002 signed with the government a controversial "pact for Italy" is no longer hopeful. (CGIL, Italy's largest union, refused to seal the deal). "No more pacts with Berlusconi," CISL declared last week to Corriere Della Sera, the country's most influential newspaper.

In this scenario Berlusconi's political future seems pretty much doomed.

"He is left with two possibilities," says Barisione. "If the economy gets better he could try to use his powerful propaganda machine to make an electoral campaign centered around his image. This way he will get some voters back, but he's unlikely to win. The other option is to leave the candidacy to another member of his coalition, keeping for himself the role of the leader of the party. This solution would give the center-right alliance more chances to win. It is difficult though to imagine Berlusconi leaving the command to somebody else, even if is an ally."

Of the many hopes the mogul disseminated in the past four years, only his economic miracle soon-to-be-a-nightmare remains. Even the five-point "contract with Italians," signed on television before the 2001 elections, has been forgotten.

Perhaps the late Indro Montanelli, for years Italy's most popular journalist, was right. "Berlusconi's a virus," he once said. "The only way for Italians to get rid of him is to experience his effects and develop the right antibodies." Maybe that time has eventually come.
©2005 OhmyNews
Other articles by reporter Raffaele Mastrolonardo

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