ITALY:ON YET another dramatic day of market turbulence, Italian prime minister Silvio Berlusconi continued to be the enigmatic centre of attention yesterday.
Mr Berlusconi anointed as his likely successor a 41-year-old Sicilian lawyer, Angelino Alfano, best known for trying, as justice minister, to guarantee the Italian prime minister immunity from prosecution in the courts.
Mr Alfano, the secretary of Berlusconi’s party, the Freedom People, was in “pole position” to be the right’s candidate at the elections he wants to see early next year, the departing PM told one of his own television channels yesterday. His appointment would signal a “generational change”, Berlusconi said.
In another interview, given late last night to La Stampa, Berlusconi said: “I shall not be standing again. Indeed, I feel liberated. Now is Alfano’s moment. He’ll be our candidate for prime minister. He’s very clever, better than one might think, and his leadership has been accepted by all.”
Mr Berlusconi told the president, Giorgio Napolitano, on Tuesday evening he would resign once parliament had approved the economic austerity measures agreed with the European institutions.
The point about Mr Alfano, a member of Mr Berlusconi’s party since its inception in 1994, is that he is very much seen as a Berlusconi “creation”, something of a Dmitry Medvedev to Mr Berlusconi’s Vladimir Putin. Many commentators believe Mr Berlusconi would continue to exercise much behind-the-scenes influence with Mr Alfano in office and might even contrive to have his name attached to the party electoral lists.
It was Nobel Prize-winning playwright Dario Fo who most succinctly voiced these concerns yesterday when he described Mr Berlusconi’s announced resignation as “a trap”.
With the markets apparently reacting to the uncertainty, shares plunged on the Milan stock exchange, while Italy’s benchmark 10-year bond yield soared past 7 per cent, seen as the point of “no return”.
By the end of the day, the bond yield was 7.25 per cent while the benchmark FTSE Mib index was down 3.78 per cent, with shares in Mr Berlusconi’s Mediaset company losing 12 per cent.
Faced with the market turmoil, head of the Confederation of Italian Industry Emma Marcegaglia declared that Armageddon was nigh, arguing that if the current negative trend continued, Italy would soon be denied access to the financial markets. Further confusion was engendered by the government’s delay in presenting the text of the austerity budget in the senate.
This key legislation, announced for the morning, then the afternoon, finally appeared in the senate late last night.
Comprising 25 articles based on recommendations from the ECB, the Bill was set to be rushed through parliament, notwithstanding reported government amendments.
Then, and not for the first time, Italian president Giorgio Napolitano intervened, issuing a statement intended to pour oil on troubled waters. Essentially, the president confirmed there was “no uncertainty” about Mr Berlusconi’s resignation, that the austerity budget would be approved within days, and that party consultations leading to a new government or an election would take place as quickly as possible.
As the crisis develops, the option of an early election seems to be losing favour not only with the markets but also with a majority of the political forces. Reports last night suggested that as many as 50 former Berlusconi supporters would argue in favour of an immediate institutional government rather than an early election.
In that context, the appointment of Prof Mario Monti as a life senator last night by Mr Napolitano may be significant, given that the former European commissioner is seen by many as the possible head of a future institutional government.
Further heightening the sense of impending gloom on a traumatic day were two important events. Firstly, Italian bankers and industrialists issued a joint appeal, calling for an emergency, institutional government to handle the crisis. Secondly, the arrival in Rome of "parole" inspectors from the European Commission and ECB underlined the extent to which Italy is now Europe's most observed man. – (additional reporting: Guardianservice)