A failing economy and delayed austerity plan reveal Berlusconi's real priorities, writes PADDY AGNEWin Rome
THE DAUPHIN has been named. He has even been installed in a brand new, purposely created post. But will this heir apparent get to rule?
In short, is Italian prime minister Silvio Berlusconi ready to hand over the control of his People of Freedom (PDL) party to his justice minister, Angelino Alfano?
At a typically enthusiastic meeting of the PDL national council in Rome on Friday, Alfano was appointed to the new post of “party secretary”, a role which in Italy traditionally means party leader. So then, in the wake of an Italian spring that has seen Berlusconi experience devastating defeats both in local elections and in a referendum, is the Great Communicator about to pass on the mantle?
Many have their doubts, arguing that this current fin de régimemoment could drag on for longer than we think (in theory, this legislature ends in 2013). Furthermore, given his immense financial power and media influence, will Berlusconi really hand over the reins, or will he continue to direct matters from off stage? (Ranked Italy's third richest man behind chocolate king Michele Ferrero and Luxottica glasses tycoon Leonardo del Vecchio, Berlusconi's personal wealth is estimated by Forbes to be about €6.5 billion.)
Friday's "coronation" was an unusual event. There was no electoral contest. Rather, the packed hall of 1,072 delegates, at Berlusconi's instigation, "acclaimed" Alfano with a unanimous vote. Just one brave soul, Antonio Pedicini from Friuli, dared to defy the roi-soleil, arguing for a more democratic process. (His future in the party will be worth following.)
Not everyone was impressed with this PDL “election”. Pierluigi Bersani, secretary (leader) of the Democratic Party (PD), observed: “That’s just fantastic. I had to work a lot harder to become secretary. But is he the secretary of the party or is he the personal secretary of Berlusconi?”
If Alfano’s election seems unusual, what do we make of the potentially much more important €47 billion austerity package introduced by the Berlusconi government last week?
The point about the package is that €40 billion of the intended €47 billion cuts are scheduled to be introduced in 2013 and 2014, by which time Berlusconi may no longer be in power.
In other words, it will be the next government’s problem.
Little wonder PD leader Bersani called this aspect of the package a “a time bomb”.
Admittedly, this timetable was agreed with the European Commission, but it nonetheless prompted ratings agency Standard and Poor’s to comment that there remained a one in three chance of its lowering Italy’s long-term rating over the next two years.
Two weeks ago, Moody’s sounded a warning, saying Italy’s failure to deal with its debt “mountain” had led the agency to put its Aa2 rating for Italy “on review for downgrade”.
Moody’s also warned it might downgrade the long-term debt ratings of 16 of Italy’s biggest banks.
All of which prompted the stock exchange regulatory board to summon the agencies to meetings this week.
There is nothing new about a weak Italian economy, crippled by minimal growth and a huge 120 per cent debt-to-GDP ratio. There is something new, though, when ratings agencies talk like this and when, as happened last week, the gap between the yield on Italian government bonds and German government bonds reaches a euro-era record high (Remind you of anything?).
In this context, perhaps the markets would have appreciated an austerity package based more in 2011 and 2012 and not three years from now.
The Berlusconi cabinet last week also enacted an emergency cabinet decree intended to facilitate the city of Naples and the Campania region to solve its ongoing rubbish crisis – by allowing the Campania authorities to “transfer” garbage to other regions. President Giorgio Napolitano duly signed the decree two days later, but not without observing that it was “inadequate” and would not solve Campania’s problems.
The suspicion about 74-year-old Berlusconi remains. Whether it be a party appointment, a crisis about rubbish on the streets, or the country's finances, the important thing in his Big Brother TV version of politics is to be seen, to appear to be doing something. The fact that the measure in question may be inadequate or irrelevant is hardly a consideration.
Governing well is not the issue for him. His concern is to hold on to power.
We have our doubts about just how radically the Dauphin Alfano will (be allowed to) change the PDL party.