By Press TV
By Arash Zahedi
Greece has been known as the trigger point for the Eurozone crisis that was seen in Portugal and Ireland later. But it was in Italy that Europe’s bad looking fiscal problem claimed its first high profile victim: Silvio Berlusconi.
Berlusconi has announced he will step down once the Italian senate approves the financial measures Europe has asked Rome to implement. Berlusconi admits the senate is “paralyzed” by his bid to remain in office and the announcement is probably to boost chances of the Parliament’s passing the austerity measures. This will officially bring to end the 17-year rule of the man many Italians blame for Italy’s financial injustice, among other things.
Interestingly and as odd as it may seem, this time for Berlusconi, it is not allegations such as tax evasion, senators’ corruption, bribery (specially paying bribes to judges), embezzlement, and unbelievably being in cahoots with the Mafia. It is not even the crime of paying for sex with a young underage girl and then levering his office power to get her released on her other charges.
What is finally forcing down this, as some say, flamboyant, scandalous and erratic yet amusing leader is the financial crisis and the lack of confidence in him among Italian lawmakers. Still, looking at his scandal-riddled resume, how Berlusconi has survived and managed to cling on to power for a better part of two decades in Italy, if not a miracle, is a mystery.
Italy’s observers and the public may view the resignation pledge with joy, concern or skepticism.
Consumer prices have sky rocketed lately but wages have remained the same. Adding to the concerns is the rising jobless rate that, needless to say, affects life savings and pensions.
Younger people, of course, look on the bright side. They say it is a chance for Italy to renew its culture and for the people to develop a greater sense of civic duty.
Yet, no matter what has been done by Berlusconi or in his name, the fact of the matter for the world’s 8th largest economy, at this point deeply indebted, is quickly losing the faith of the investors. They fear that an Italian default could send catastrophic shock waves through markets.
European leaders urged market confidence to be restored but what would they do with Berlusconi? The markets have made their distrust of Berlusconi known. The premier is himself thought of as a big part of the credibility problem due to his leadership so divisive that could endanger political consensus on austerity measures and economic reforms.
Berlusconi opponents have been quick to react as well. Late on Tuesday, they said they were mulling a quicker ouster for the prime minister. Leaders of the opposition have been calling for President Giorgio Napolitano’s support, whose post is largely ceremonial, for plans to form a new unity government run by a neutral politician. Yet, there is no guarantee that a different government would be a better one.
However, Berlusconi, determined to remain at Italy’s political scene, has slammed the bid. He says new elections should be held after his resignation instead of hastily forming a government. This should be given serious thought. Although the premier has said he will not run for re-election, in theory he could run for the post again.
The media tycoon’s exit, though not 100 percent clear yet, will nevertheless add to concerns on who would lead Europe’s 3rd largest economy through difficult times in the months to come and if Italy’s divided political class could unite behind a plan to win back investor faith.
Italy’s political observers think the 75-year-old premier, as he has announced, will back his own former justice minister, Angelino Alfano, as the candidate for the post of prime minister. They think if he is to follow his old friend Vladimir Putin’s way who named Dmitry Medvedev as his successor, he could barely afford any one candidate better than Alfano.
One should take note, of course, that Alfano is 41 and described as young, clever but unwaveringly loyal to the outgoing Berlusconi.
However, reviewing the status quo, one should not only blame Italy’s current financial hardship on Berlusconi. Banks should share a part of the blame as well. Something to bear in mind is that banks created a bubble by lending that was for a large part irresponsible. This made spending easier for some Western governments. The same banks today hold much of the debt these nations have issued.
Italian prime minister’s resignation offer, if carried out, would be the most significant in Europe’s two-year-old debt crisis and would be cautiously viewed by leaders in Portugal, Ireland and, most recently, Greece.
As another troubled euro zone member state, Greece, similar to Italy, is witnessing a power shift. George Papandreou, prime minister of the Hellenic Republic has agreed to resign as soon a unity government can be formed. Greek politicians say they are close to agreeing on a new government.
In Rome and Athens, the premier position might be up for grabs but what happens from here in Lisbon and Dublin and probably elsewhere is still unclear.
Arash Zahedi is a Tehran-based political analyst and broadcaster.