Silvio Berlusconi’s resurrection shakes up Italy and the EU

With his perfectly dyed dark hair and his ivory-white teeth glistening in the lights of the television studio, Silvio Berlusconi – the octogenarian comeback kid of Italian politics – was reminiscing last month about his first election campaign.

It was 1948, he was 12 years old, and the young Silvio was putting up posters for the centre-right Christian Democratic party in its ultimately victorious confrontation with the Italian Communist Party. There was one image that forever stuck in his mind.

“It said, ‘In the voting booth God sees you, Stalin doesn’t’,” Berlusconi, now 81, said with a grin, pausing for effect. “It was truly beautiful.”

The presenter, Massimo Giletti, laughed, while the studio audience, sitting on both sides of the two men, clapped enthusiastically – and this was not even one of the TV stations that Berlusconi owns.

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With Italy due to go to the polls on March 4th in a general election that is the next big political test for Europe in an era of resurgent populism, the media mogul and former prime minister is exactly where he likes to be – at the centre of the country's political debate.

Assailed by scandal and ill-health, Berlusconi's political career was languishing – if not defunct – only a couple of years ago. But in a remarkable turnround his centre-right coalition is leading opinion polls with 36 per cent of the vote, with the anti-establishment Five Star Movement and a centre-left grouping led by former prime minister Matteo Renzi and current prime minister Paolo Gentiloni each on about 28 per cent.

Party leader

Since he is banned from public office, Berlusconi could not personally return to Palazzo Chigi – the seat of the Italian government – if he is victorious next month, but would still be calling the shots as party leader.

And even if the centre-right is unable to win a majority of seats and form a government, Berlusconi's party, Forza Italia, is still likely to be the linchpin of any attempt to forge a grand coalition. Either way, there is a strong chance that the Cavaliere – as he has long been known – will enjoy huge influence after the elections.

Berlusconi’s return carries important implications for both Italy and the EU. In Rome it represents the most striking evidence of the country’s difficulty in renewing its political leadership. When Renzi, now 43, rose to power as prime minister four years ago, hopes were high that he would be the standard-bearer of a younger, reformist generation of politicians, but his tenure ended in a stinging rebuke from Italian voters in a referendum on his overhaul of the constitution in December 2016.

The prospect of having to deal with Berlusconi again could also be deeply unsettling for European policy-makers and investors, especially at a time when Emmanuel Macron, France's president, and Angela Merkel, Germany's chancellor, are trying to reboot the EU and push for further integration.

Any bargain on greater political union for the euro zone would probably include structural reforms to modernise Italy’s economy – and fiscal discipline. On both counts there is deep scepticism of Berlusconi’s record.

"There is a trust deficit there, and he will be something of a wild card," says Mujtaba Rahman, head of the Europe practice at Eurasia Group. "This could be deeply unhelpful and distracting."

Sex scandals

It is not a scenario many would have imagined in late 2011 when Berlusconi stepped down from office in disgrace amid sex scandals and skyrocketing debt yields, shunned by EU leaders, including Merkel and then French president Nicolas Sarkozy.

Nor did it seem likely in 2013 when Berlusconi was convicted of tax fraud and ordered to perform 10 months’ community service at a retirement home – or in 2016, when he underwent open heart surgery.

But somehow Berlusconi found a way back. He capitalised on the decline of the Democratic party led by Renzi, following the 2016 referendum debacle.

Last year he shepherded centre-right candidates to success in races against centre-left incumbents, such as the battle for mayor of Genoa and the governorship of Sicily, harnessing voter dissatisfaction over the sluggish economic recovery and a migration crisis that has brought more than 620,000 people to Italian ports from north Africa since 2014.

In his old age, Berlusconi is casting himself as a reassuring elder statesman with pro-EU views and a modest, vegetarian lifestyle who can restore wellbeing to disgruntled middle-class families.

"One of the big laws in Italy is that if you stick around long enough you can become a saint," jokes Lucia Annunziata, editor of Huffington Post Italy. "He's played it well."

Populist parties

It is one of the ironies of the political situation that many EU governments find themselves in the unfamiliar position of rooting for Berlusconi. A strong performance by Forza Italia would probably mean a weaker result for Five Star, as well as the Northern League, Berlusconi's Eurosceptic coalition partner. In Brussels they fear the populist parties even more than Berlusconi.

Last week he was welcomed with open arms by Jean-Claude Juncker, the European Commission president, Michel Barnier, the EU's chief Brexit negotiator, and Antonio Tajani, the EU parliament president and a possible premier in a Forza Italia-backed government.

Berlusconi joked about his old age, comforted them about his commitment to EU budget rules and clinched the endorsement of the centre-right European People’s party.

“The mood was very cordial and light-hearted, like a trip back home,” says one person familiar with the talks. “They don’t see him as a burden.”

Berlusconi has done his part to earn the sympathetic hearing by remaining anchored to the EU's centre-right mainstream in recent years, attending the funeral of Helmut Kohl, the longtime leader of Germany's Christian Democrats, last year, and refraining from attacking Merkel.

He has not endorsed Donald Trump, rejecting any similarities and distancing himself from some of the US president's more controversial positions – most recently on trade and protectionism.

"He has always been somewhat of a name-dropper – he always talked about his friend Vladimir [Putin], his friend [Recep Tayyip] Erdogan. But have you seen Berlusconi talk about Donald even once?" says Francesco Galietti of Policy Sonar, a Rome consultancy.

New spending

Yet even dealing with a more benign version of Berlusconi could be a big problem for the EU. He is campaigning on a platform of tax cuts and new spending – particularly on pensions – that could be very hard to square with EU budgetary rules.

Moreover, his coalition platform calls for “fewer constraints from Europe” – including “no austerity policies”, a “revision of EU treaties” and lower Italian contributions to the EU budget.

Given his long-standing friendship with Putin there is also bound to be scrutiny of his position on EU sanctions against Russia, which he has criticised.

He could also conceivably press for a more lenient line towards the UK in Brexit negotiations as he may be less attached to the principle of unity among the 27 remaining EU members.

"In the phase two trade discussion [of the Brexit talks] there are real economic issues at stake, and Italy is the single most important state that may break away from the Franco-German axis," says Rahman. "If that happens, then what do the Netherlands do, what do the central Europeans do?"

Stefano Stefanini, a former Italian ambassador to Nato who is a Brussels-based consultant for Project Associates, says the "old Berlusconi" could have been a "real spoiler for the EU" by adopting nationalist positions close to those of Viktor Orban, prime minister of Hungary, and Jaroslaw Kaczynski, the leader of Poland's ruling Law and Justice party. Critics often warned that Berlusconi's clashes with the judiciary could tilt Italian democracy towards a form of illiberal semi-authoritarianism.

But there is more uncertainty than fear in Brussels over his return. “It’s a mix of wait-and-see and a sense of fatalism,” says Stefanini. “How is it possible that Italy cannot find new leaders?”

Equal measure

One former senior EU official, who declined to be named, says it is difficult to predict where Berlusconi might stand. “It’s hard to say he’s anti-European, it’s hard to say he’s pro-European; he doesn’t have any principles.”

In Italy, Berlusconi’s resilience has thrilled supporters and bemused opponents in equal measure.

"Only one Berlusconi can be born every 100 years," says Gabriella Giammanco, a 40-year-old MP for Forza Italia who will be running for re-election in Sicily. "He generates curiosity, he generates affection. He still needs security cordons when he walks around, otherwise he will be overcome by the enthusiasm."

Anna Ascani, a 30-year-old Democratic party MP from Umbria who is close to Renzi, warns of the "short memories" of Italians. "I was seven years old when he first won in 1994. I have to think he did a lot of damage to my generation."

According to a survey by Ipsos, the pollsters, released this week, Berlusconi's strongest support comes from pensioners, housewives and the unemployed. It is the old, rather than the young, who are driving Forza Italia's comeback, and female voters, rather than male, even in the era of the global #MeToo revolt against sexual harassment and despite his own history of lavish parties with underage call girls.

Berlusconi’s ability to connect with his base was on vivid display during his interview with Giletti, when he offered tributes to the greatness of Italian women – especially mothers – and the importance of family.

“I was very fortunate to have five children – each one is better than the other,” he said, though he is closest to Marina, his 51-year-old eldest daughter who manages his business empire. “My mother went to heaven at a certain point, and Marina took her place. I used to call her every day counting on her sweetness, her wisdom, her affection, and I do the same now with Marina.”

Less popular

Yet even with the revival in his fortunes, Berlusconi remains more politically vulnerable than when he was in office. Forza Italia is polling at about 16-17 per cent, a fraction of the numbers Berlusconi scored in previous elections when he was at the height of his power. He is personally less popular than both Gentiloni and Luigi Di Maio, the Five Star candidate for prime minister.

And there are questions about whether he is as able a campaigner as he was in the past. Berlusconi has stepped up his radio and television appearances, his natural habitat and the springboard for many victories. However, he was forced to cancel another interview on Wednesday because of “fatigue”, according to Italian media.

He has embraced social media, but his Twitter following is smaller than his rivals and he may struggle to match Five Star in using the internet as a political tool.

Judicial woes are also still hanging over him: he is facing trial for paying off women to make false statements about his infamous “bunga bunga” parties. He has denied the charges.

His pitch to voters has not changed much: it is that he alone can engineer an Italian revival through lower taxes and more generous pensions.

“He’s simply not a liberal free marketeer, we’ve been waiting for that in Italy for decades,” says one senior banker. “His economic policies are very reliant on the state.”

Past campaigns

Berlusconi also uses fear to great effect. In past campaigns it was the scourge of communism, but he now insists there is an even greater threat in Five Star, which he describes as a dispenser of “poverty, vigilante justice and rebellion”.

If Berlusconi’s old tricks work again, his country – and the rest of Europe – may oddly breathe a sigh of relief. But it could be short-lived.

“Sooner or later he will disappear and the centre-right will implode; the centre-left is taking a walk in the desert, so it’s a mess,” warns one senior Italian business leader. “There may be a grand coalition but it will be limited, and the big risk is this all gives bigger space to Five Star.”

ITALIAN GENERAL ELECTION: THE ALLIES

Forza Italia, Northern League and Brothers of Italy

Silvio Berlusconi’s centre-right party Forza Italia has dominated the country’s politics since its launch in 1994. Its support fell to 15 per cent after he was forced to resign in November 2011, but proved resurgent in last year’s municipal and regional elections.

Forza Italia has allied with the right-wing Eurosceptic and anti-immigration Northern League and the Brothers of Italy. This coalition is currently leading the polls with 36 per cent of the vote.

THE OPPOSITION

The Democratic Party and Free and Equal

The centre-left and pro-European Democratic Party (PD) forms the backbone of the governing coalition led by prime minister Paolo Gentiloni. The party leader is former prime minister Matteo Renzi, whose reformist government presided over economic recovery in the past four years. However, this has not translated to the polls, and it is trailing the centre-right coalition with 28 per cent of the vote.

Free and Equal was formed after the PD lost a constitutional referendum in 2016 and prominent left-wingers defected from the party. Its aim is to win the votes of left-wing Italians who disliked the centrist leadership of Renzi. Critics say the party could split the vote and help the centre-right or Five Star to power.

THE INSURGENTS

Five Star movement

Five Star Movement (M5S), whose prime ministerial candidate is Luigi Di Maio, won 25 per cent of the vote in its first general election in 2013, and is the single most popular party with 28 per cent, according to the most recent opinion polls. Its platform espouses direct democracy, the green economy and a fight against corruption.

The movement has since been in the spotlight because of internal divisions, lack of experience and its mismanagement in Rome, where it holds the mayoralty. If M5S performs particularly strongly, one scenario could see it allying with the Northern League and Brothers of Italy. Such a government could question membership of the euro and Nato, and take a hard stance on immigration.

L’AQUILA: QUAKE-HIT CITY CHANGED VIEW ON FORMER PREMIER

At Bar Del Corso on the main drag of L'Aquila, a city of 70,000 people in the mountainous region of Abruzzo, Luca Ciuffetelli, the 52-year-old owner, has a soft spot for Berlusconi.

After an earthquake struck the region in April 2009, killing more than 300 people and leaving many more homeless, Berlusconi hosted the G8 summit in the city three months later and moved quickly to rehouse the victims, welcoming them into temporary homes with a bottle of chilled sparkling wine.

“There was cutlery, plates, bedsheets – and after such a tragedy it made us feel good, it gave us belief that we could make it,” Ciuffetelli says. “He may be pompous, but he did something great.”

Nine years later L'Aquila has emerged as a symbol of Italy's rightward shift after Pierluigi Biondi, of the far-right Brothers of Italy party, won the mayor's race with the backing of Berlusconi over the centre-left incumbent. National trends, such as difficulty finding jobs and worries over immigration, are certainly playing a role, but there is also dissatisfaction with the way the earthquake reconstruction has unfolded.

Much of the city centre is still being rebuilt; there are many cranes but few open shops, and plenty of debris. Many residents, such as Ciuffetelli, are still in temporary housing or have left permanently. His bar has survived because it was housed in a fascist-era concrete building and suffered little damage – but mainly relies on business from construction workers and visitors indulging in “rubble tourism”.

There is also plenty of opposition to the former premier. Ginarca La Torre, a 59-year-old fishtank saleswoman visiting from Puglia, was scathing about his return. “He should have never existed, because we have been ruined, ruined, ruined. He’s a clown, and that’s an understatement. A moderate? It’s all nonsense.”

For Giulia Micheli, a 22-year-old psychology student at the city’s university, Berlusconi is simply “obsolete”, but there could be a silver lining. “If the centre-right win, things will get worse, we will hit rock bottom and maybe we will wake up from this slumber.” – Copyright The Financial Times Limited 2018