Traditionally on losing an election, a politician calls to congratulate the winner and urges voters to put their differences aside and come together for the good of the country. But Silvio Berlusconi is anything but a traditional politician. Instead, after his narrow defeat by the center-left candidate, Romano Prodi, Berlusconi made charges of fraud (even though his own government had overseen the voting), demanded a recount (which quickly confirmed the original result), and demanded that he be included in any new government in order to avoid ‘civil war.’
Prodi will probably have enough seats to put together a parliamentary majority. But a weak government, presiding over a sharply divided country, will likely make it possible for Berlusconi to block legislation. Or Prodi’s government could be short-lived, and there could be new elections in the not-too-distant future.
A close outcome was not only predictable but actually planned by Berlusconi during his government’s twilight as a way of lessening the impact of possible defeat. A few months before the election, Berlusconi studied polls that showed the center-left winning a substantial majority in parliament with the country’s winner-take-all electoral system. He decided to change the election system and return to the proportional representation that the Italian electorate had strongly rejected in a popular referendum in 1993. The old proportional system was thought to have encouraged a plethora of small parties, unstable government majorities, short-lived revolving-door governments, and ceaseless horse-trading among coalition partners, all of which fostered corruption and lack of clear policies in the post– World War II period.
Berlusconi came to power for the first time in 1994 thanks to the system of winner-take-all, and he declared at once that the majoritarian system was his “religion.” He lost his religion when studies showed his coalition would do better in 2006 with the proportional system. He and his center-right allies calculated that even if the parties of the center-left won, the proportional system would fragment their vote and leave them with a contentious, unstable coalition that would need the center-right’s help in order to govern. In a moment of candor, Berlusconi’s minister for reform, Roberto Calderoli, admitted, “The election law? I wrote it, but it’s a porcata,” a vulgar term that roughly means “a piece of pig shit.” Clearly it was intended to make the country ungovernable for Prodi and his leftist coalition.
Ironically, however, Prodi owes his thin majority to two changes in the electoral law that the Berlusconi government pushed for. The new proportional system includes a “reward” of about sixty extra seats for the majority party in the lower house of parliament. And although the center-left actually lost the popular vote in the Senate, it won two decisive extra seats there because of a new law allowing Italians living overseas to elect their own members of parliament. Berlusconi gambled that overseas voters would give him a majority; they voted three to two against him.
Although a defeat, the election results are a considerable achievement from Berlusconi’s point of view. Rather than being swept from the scene in a landslide as many expected months ago, he remains the head of Forza Italia, Italy’s largest political party, and an arbiter of the country’s future. A few months before the election, most polls showed him behind by eight to ten points and even the day of the vote exit polls gave the center-left a comfortable margin of victory of 4 to 5 percent. Despite its uninspired campaign, the center-left appeared to have a seemingly insurmountable advantage: extremely widespread dissatisfaction with the performance of the Berlusconi government. The latest economic results, which came out as the campaign kicked off, confirmed that Italy had zero growth in 2005, the fifth straight year of virtual economic stagnation. During the last five years, the Italian economy grew by only 3.2 percent, the lowest of all countries in the European Union and under half the average for the rest of Europe (7.1 percent). Italy’s standard of living fell by 7 percent between 2001 and 2006. Productivity fell by more than 10 percent.
Strictly speaking, Berlusconi should not even have been a candidate for prime minister. During the 2001 election campaign, while signing his so-called “Contract with the Italians” on national TV, Berlusconi made five specific promises to Italian voters, saying that if he failed to maintain at least four of them, he would not run for office again. Government statistics show that Berlusconi honored only one of those promises—he raised minimum old-age pensions to one million lire, about $600 a month. He succeeded to only a small degree in two others, and failed entirely in the remaining two. Crime has gone up; taxes have barely budged; he has created an estimated 600,000 jobs instead of 1.5 million; and he has begun a small number of the public works he promised to create. The tame journalists chosen to moderate Italy’s two presidential debates were too polite to mention “the contract.” Prodi himself, who seemed generally unable to mount a strong attack, failed to make an issue of the contract. But the perception that Berlusconi failed to deliver on his promises was nonetheless deeply rooted, polls showed. In foreign policy, Berlusconi committed troops to the invasion of Iraq, a move that was unpopular from the beginning with about 70 percent of the Italian people—as his reelection campaign drew near, he began to say he disagreed with it himself.
How then was Berlusconi able to claw his way back into the race, winning 49.7 percent of the popular vote—just 24,000 votes fewer than the center-left’s 49.8 percent?
Officially, the election campaign began with the dissolution of parliament on February 10, but it really commenced a month earlier, with a huge media blitz by Berlusconi. On one typical night, he was on television virtually all evening, moving from one network’s talk show straight to an entertainment program where he could boast about his AC Milan soccer team. Berlusconi spent much of the time talking about subjects other than politics, quite aware that the undecided voters he wanted to reach say they dislike politics. To them, he offered himself as the amiable family man, bringing out his ninety-five-year-old mother, and chatting about soccer, gardening, and his family’s sleeping habits. “One night I sleep with Veronica, another with our two daughters, the third with [our son] Luigi who tangles up his legs with mine.”
He also orchestrated an extraordinarily vicious press campaign against his adversaries. In early January, the Berlusconi family newspaper, Il Giornale, published a series of stories alleging large-scale corruption among the leaders of the center-left. The paper printed the wiretapped phone conversations of Piero Fassino, president of the Left Democrats, who was speaking to Giovanni Consorte, the head of an insurance company made up of left-wing cooperatives, about a takeover for a bank. “So, do we own the bank?” Fassino asked Consorte. There was no evidence of wrongdoing on Fassino’s part or of any money changing hands—only that he was taking sides in a bank takeover. In fact, so had Berlusconi in the same takeover. In one wiretap, moreover, a financial strategist reports on a meeting with Berlusconi, where they discussed the attempted takeover of theRizzoli–Corriere della Sera group, owner of the country’s largest newspaper and second-largest book and magazine publishing group, one of the few large media groups that has eluded Berlusconi’s control. “I just spoke to the prime minister who is moved by what we are doing. I told him we were pressing ahead with the RCS[Rizzoli–Corriere della Sera] takeover and that he must give us a hand.”
These conversations did not receive much attention from the Italian news media. That Berlusconi was acting improperly was not news, while unsavory behavior on the left allowed Berlusconi to insist that the opposition was no better than he was—worse, in fact, because they were hypocrites who claimed moral superiority while playing the same corrupt games.
Few pointed out that these wiretaps were in direct violation of a law that Berlusconi had fought for and passed. Embarrassed again and again by revelations of wrongdoing in his company and government, Berlusconi had passed a law strictly forbidding the wiretapping and the publication of any wiretaps of members of parliament. Police are not allowed to wiretap a member of parliament even if, by chance, a dangerous criminal who was under surveillance happened to telephone a politician while committing a crime. Numerous recordings of Mafia members chatting with politicians have been thrown out of court. According to the new law such wiretaps were not even allowed to be transcribed and placed into the public record. The conversations between Fassino and Consorte were at first available only in audio form on a few CD-ROMs and were likely published in Berlusconi’s newspaper with the help of someone in the government—a gross abuse of power that Berlusconi himself had passed severe legislation to prevent. Such a leak on the eve of an election, in a country with a genuinely free press, might have become a major story and campaign issue. It got little attention.
Berlusconi’s appearances on TV were almost always in situations where he didn’t have to answer questions; the people conducting interviews were his own employees. In one case, for a program on one of his own networks, Berlusconi arrived with his own director, who arranged the set and worked out the questions with the show’s nominal host. During the first three weeks of January, Berlusconi appeared on television for five hours and twenty-three minutes, while Prodi was present for only twenty-one minutes, a 16:1 advantage in airtime for Berlusconi, who used this advantage to set the terms of the debate for the campaign.
After the parliament was dissolved and the election campaign officially began in February, Berlusconi’s tactics appeared to change. In theory, all of the national television networks—both the public stations and Berlusconi’s networks—were supposed to comply with “equal time” rules guaranteeing equal access to the principal candidates. Berlusconi’s claims became more extravagant than ever. Responding to criticisms of the modest accomplishments of his government, he said, “only Napoleon did more.” At another point, he said, “Churchill freed us from the Nazis, Berlusconi is freeing us from the Communists.” Finally at the end, he referred to himself as “the Jesus Christ of politics,” for the patience and forbearance he displayed toward his enemies. Before an audience of devout Catholics, he vowed to abstain from sex until after the election.
These wild comments were much lampooned in the foreign press as further signs of Berlusconi’s buffoonery. But the press misunderstood Berlusconi’s strategy. In Berlusconi’s world of celebrity politics there is no such thing as bad publicity—just getting attention enlarges one’s audience and raises ratings. And Berlusconi’s constant appearances in January and February helped him slash his center-left opponent’s lead from 8 percent to about 3 percent. If you were to look back over the front pages of the major opposition newspaper, La Repubblica, the word that appeared most often in its banner headlines between January and April was overwhelmingly “BERLUSCONI.”
Essentially, Berlusconi has transformed Italian life into the world’s longest-running reality television show: every day’s lead news—flattering or unflattering, important or trivial—is about him. The entire country has taken on the eerie quality of The Truman Show, the 1998 movie in which a television producer raises a child in an artificial town that is nothing but an enormous stage set that the boy, Truman, believes to be real. Viewers around the world, meanwhile, are glued to their sets watching his every action from childhood to maturity, twenty-four hours a day.
In the final month of the campaign it appeared that Berlusconi might stumble and fall. He did surprisingly poorly in the first of two debates with Prodi. Instead of making a final appeal to voters, he complained bitterly about the rules of the debate, saying that the format didn’t allow him to explain himself or complete a point. He thus violated a cardinal rule of debating: he had essentially conceded publicly that he had lost the debate.
Berlusconi appeared on the brink of catastrophic defeat. Many moderate and conservative institutions that supported Berlusconi in 2001 had recently turned against him. The Confederation of Italian Industry (Confindustria) elected a new president, Luca Cordero di Montezemolo, who has been harshly critical of the government’s economic policy, as has the newspaper the confederation owns, Sole 24 Ore, Italy’s principal business paper. In a highly unusual move, the Corriere della Sera, pillar of the northern economic establishment, endorsed Prodi and the center-left, complaining that Berlusconi had governed principally for his own private interestsand done too little for the country. The Fiat-owned newspaper La Stampa also changed editors and adopted a much more critical tone toward Berlusconi. Even his principal allies, Gianfranco Fini of the National Alliance, the reformed Fascists, and Pierferdinando Casini, went out of their way to distance themselves from him. Fini said Berlusconi was “wrong to continue to tell voters that everything was great,” and Casini objected to Berlusconi’s “monarchical conception” of their alliance. Berlusconi denounced them as rats jumping from a sinking ship.
But the situation of “Everyone against Berlusconi” may have been congenial to him. It accentuated the Truman Show effect: everything was still about him. And despite being the head of the government and one of the main beneficiaries of the Italian political system over the past thirty years, Berlusconi likes to play the part of the outsider who takes on the establishment. For years he has insisted that the poteri forti—the powerful forces of the Italian establishment—were against him; now it was actually true.
After the first debate, his tone turned increasingly angry. “From this day forward, we change strategies,” he said. “We go on the attack…. I will use all my ammunition in the last week of the campaign when twenty-five percent of the undecided voters make up their minds.”
He clearly began to do just that. When he was asked some tough questions on a talk show on the state TV channel he walked off the set, trying to make the point that the government channels were controlled by the Communists rather than by himself. In a meeting of the Confindustria, rather than trying to win over reluctant business leaders, Berlusconi attacked his opponents ferociously, insisting that the growing forces against him represented a threat to Italian democracy:
The left with all its newspapers has invented an economic crisis that doesn’t exist in order to seize power…the Corriere della Sera, La Stampa, Il Sole 24 Ore, La Repubblica, Il Messaggero….Tell me this isn’t a danger to democracy.
Seemingly increasingly desperate, he told stories about how the Communist Chinese “boiled babies” in order to use them as fertilizer, shouted obscenities at a protester, called Prodi an “idiot,” and even said that anyone who voted for the center-left was a coglione, a vulgar term literally meaning “testicle,” but roughly translated into something like “asshole.” In typical fashion, Berlusconi at first denied he had used the word; when it was shown on videotape he insisted the left didn’t know how to take a joke. Center-left voters began carrying signs saying “I am a coglione!”
By his final appearance in Naples in April, Berlusconi’s advisers were counseling him to sound more conciliatory, but he could not restrain himself. “Do you want to be governed by people who idolize Stalin, Lenin, Mao, and Pol Pot? Do you want to be governed by people who would remove crucifixes from the classrooms?… In Holland, the left kills disabled children and in Spain allows homosexuals to adopt babies!…” By this time, a group of neofascist supporters were yelling, “Duce! Duce! Berlusconi said we will win because we are not coglioni!”
One might have thought that Berlusconi’s insulting half the electorate might backfire and alienate many moderate, undecided voters tired of the divisiveness in Berlusconi’s Italy. How is that a candidate with so many strikes against him was able to fight his opponent to a virtual draw?
One partial answer is Berlusconi’s continued domination of television. Even with the “equal time” rules in effect, he and his center-right allies received about 60 percent of the coverage on the state channels, whereas on Berlusconi’s own channels he received vastly more. His own stations were in flagrant violation of the Authority for Communications rules; they willingly paid the modest fine for doing so and continued broadcasting as they saw fit. In an election as close as this one, in which undecided voters began paying more attention to the campaign at its end, this may have accounted for a decisive couple of percentage points.
It is equally true that Romano Prodi and the center-left failed to give Italians strong reasons to vote for them. They seemed to think it was enough simply not to be Berlusconi. Prodi, an economist and former Christian Democrat with the unassuming and uncharismatic manner of a parish priest, promised a more “serene” and “unified” Italy, and avoided attacking Berlusconi. In the first debate about Berlusconi’s conflicts of interest, Prodi failed to cite any of the dozens of laws that had been passed specifically for Berlusconi’s benefit or from which his businesses have deeply profited. He said hardly anything about the disastrous economic performance of the Berlusconi years or about the comparatively superior performance of his own previous government. Why should people vote for a candidate who can’t give them good reasons for voting for him?
The duel between Berlusconi and Prodi forced Italians to choose between the same tired old faces they were faced with in 1996 (when Prodi first won) and sent a depressing signal to many Italians eager for a change. Both the left and the right conveyed the impression of a tired country in desperate need of fresh minds and new ideas to confront the serious problems of a country in decline. “Politicians are like detergents, they’re all the same,” one Roman shopkeeper told me recently. Not particularly convinced by either side, Italian voters fell back on their traditional voting patterns, more or less evenly divided between right and left.
Writing in The New York Times, Gianni Riotta, deputy editor of the Milan newspaper Corriere della Sera, argued that Berlusconi’s defeat shattered several myths:
First, it put an end to the belief in the omnipotence of television, of Mr. Berlusconi’s so-called videocracy. When challenged by a serious contender, no leader can win by relying on only a few talking heads comfortably nestled in television studios…. Italian democracy remains as vibrant today as a good red wine from Tuscany.
“I think that’s nonsense,” says Giulio Anselmi, editor of the Turin newspaper La Stampa:
People turned against Berlusconi not because they had enough information to allow them to change their minds, but because the things they were hearing and reading in the media were so much at odds with what they were experiencing—economic stagnation, rising prices—that they simply became fed up.
While control of television and much of the press could not guarantee victory, it allowed Berlusconi to win major battles on issues of great importance to him. In general elections, it is difficult to persuade voters that they are better off if their bank accounts tell them that they are not. But on issues that they may not understand clearly, people are much easier to manipulate. Berlusconi won the 1995 referendum that would have broken up his monopoly on private television in Italy because his mass media outlets succeeded in convincing millions of Italians that the referendum would have effectively ended commercial television in Italy, while the other side had almost no effective means to put its message that if Berlusconi had to sell one or two of his networks to other private owners, viewers would have more choices. By winning the referendum he retained his ability to largely control political life in many other ways.
If Berlusconi initially entered politics to save his television and financial empire and to defend himself against criminal prosecution, then his political career can only be judged a complete success. But he has achieved much more than that: he almost single-handedly derailed the national corruption investigation known as Operation Clean Hands. He greatly weakened the war against the Mafia. He made it possible for politicians to openly mix public affairs with their private interests, and created a politically slanted television that in many ways anticipated developments in the United States and elsewhere.
It is difficult to exaggerate the degree of popular support for the investigations of public corruption that took place in 1994 when Berlusconi first “entered the playing field.” The magistrates who conducted the investigations were highly trusted; and Antonio Di Pietro, the most prominent of the prosecutors, was literally the most popular person in the country—far more so than Berlusconi himself. Similarly, between 1992 and 1995, prosecutors in Sicily and elsewhere accomplished the seemingly impossible by arresting thousands of mafiosi, including the boss of bosses, and helped bring the murder rate in a country of nearly 60 million people down by 50 percent. The Mafia seemed on the verge of defeat. The entry into politics of a billionaire who owned TV stations and the country’s leading soccer team and whose company was already under investigation changed the atmosphere; it had the immediate effect of making criminal justice a political issue: any further effort to prosecute Berlusconi or his associates would automatically be seen as a political attack.
In order to reverse the seemingly irresistible momentum of the corruption investigation, Berlusconi conducted an all-out attack against the judges of Milan and Palermo that changed the Italian political landscape even more radically. Behind the scenes, people in Berlusconi’s inner circle started a secret investigation into Di Pietro’s past. Found to have accepted an interest-free loan that was embarrassing for him but not illegal, he resigned; but then became the subject of dirty press campaigns making unsupported charges. The overall effect was to confuse the public and to leave Di Pietro’s image muddied. After years of false attacks on Di Pietro, Berlusconi’s daily newspaper Il Giornale made a large financial settlement with him and printed a long article retracting much of what the paper had written in the previous several years. But the years of libelous stories alleging that Di Pietro was himself corrupt, and had foreign bank accounts for receiving illegal payments, could not be outweighed by a one-day retraction.
Italians had meanwhile become so used to the soap opera of Berlusconi’s struggle with the Milan prosecutor’s office that many of them simply accepted an unprecedented situation in which a criminal defendant who was also the country’s richest man, and its largest media owner, became prime minister and the head of the country’s largest political party.
The control of hundreds of seats in parliament and thousands of key positions in the state bureaucracy together with vast power over television and press meant that Berlusconi could actually manufacture pseudo-scandals at will. Thus, for example, vehement accusations of supposed judicial wrongdoing would prompt Berlusconi’s troops in parliament to call for a parliamentary inquiry or disciplinary proceedings against the judges. The Berlusconi press and television would then report on these events, quoting members of parliament or the government and giving an appearance of substance to their initial charges. There would then be a new round of stories and of reactions from politicians. The result was a remarkably efficient self-perpetuating media machine, kept in constant motion through the feedback mechanism between Berlusconi’s media employees and his political employees. Almost invariably, the charge would turn out, after a few weeks, months, or years, to have no substance—a fact that would go unnoticed in the Berlusconi press (and often in other papers as well). By that time the country would already have gone on to a new series of equally unfounded charges.
Ten years ago Berlusconi stunned the country by holding up at a press conference an electronic surveillance device which he said had been found at his house. He railed against the “outlaw prosecutors” who were persecuting him. Politicians on the left and right denounced this outrage which risked subverting Italian democracy. An ally of Berlusconi said that what had happened was worse than the Watergate scandal that brought down President Richard Nixon. Weeks later a criminal investigation found that Berlusconi had held up an old bugging device that had been placed in his house by his own security guards. This discovery received far less attention in the press than the original dramatic revelation, in which the Italian public was put on alert that its constitutional order was at risk because of rogue prosecutors.
A decade of rule by a political leader who has continued to own a vast media empire while denying well-documented corruption charges with the help of his own government has significantly lowered the moral standard in Italy. In the past, in fact, it was virtually automatic that a high-level public official would resign if suspected of a serious crime—let alone indicted or convicted; he would return to public life only after he had been cleared.
Berlusconi’s prolonged presence in politics has made the entirely abnormal appear normal. Some Italians have accepted that the owner of the largest media company has become prime minister without divesting himself of his interests; no one seems surprised that the parliament contains dozens of his employees, or that they pass laws that help his company. Since a businessman who was already under investigation when he entered politics could become prime minister, hardly anyone seems appalled that he should get his co-defendants and their lawyers elected to parliament so as to give them parliamentary immunity. Nor has there been any serious complaint when these lawyers in parliament write laws to help their clients escape prosecution in cases they might lose at trial.
In 2005, Marcello Dell’Utri, Berlusconi’s close friend, head of one of his principal companies, ex-campaign manager, and member of parliament, was convicted of collusion with the Mafia as well as attempted extortion. While his case is being appealed, not only did he not resign from any of his positions, he ran for reelection without controversy. Thus, a man with well-documented ties to Cosa Nostra remains perhaps the most influential politician in choosing parliamentary candidates for Italy’s largest political party, many of whom also have a distressing history of friendly relations with organized crime bosses. Cesare Previti, Berlusconi’s chief business lawyer, has been convicted twice of keeping a series of judges on his payroll while representing Berlusconi. Previti was put up for reelection in a safe seat this year without any discussion while he also appeals his case.
At a retreat for future candidates for Forza Italia, Marcello Dell’Utri actually gave lessons on how to beat the rap if one is accused of a crime. “First,” he said, “never testify, always take advantage of the right against self-incrimination. Second: never plea-bargain unless you are caught red-handed.” His fifth and most important principle laid out the main strategy of all the Berlusconi defendants:
Let the case last as long as possible….In desperate cases, that is to say, almost always, don’t worry about the principal anomaly of trials: their interminable length. On the contrary, the rule is to make them last as long as possible…. With time, lots of things can happen: the prosecutor or the judge might die, a witness might die, the atmosphere around the case might change. Things change.
That criminal trials now, on average, last twice as long as they did ten years ago is owing in large part to the laws passed by members of parliament like Previti and Dell’Utri, who are criminal defendants. A dysfunctional justice system serves the double purpose of letting Berlusconi and his associates drag out their cases and avoid jail while increasing the public distrust of the magistrates.
During the election campaign, British authorities concerned with a routine tax evasion case turned up a curious letter of Berlusconi’s chief London lawyer, David Mills—the husband of the UK’s culture minister, Tessa Jowell. In the letter, Mills admitted that he had received $600,000 in exchange for keeping Berlusconi’s name out of court testimony. For years, Mills had managed “very discreet” off-shore bank accounts for Berlusconi’s company—a hidden parallel corporate universe worth some $1 billion that Berlusconi’s Mediaset uses for transactions such as personal payoffs and takeover of companies Berlusconi wasn’t supposed to own. In his letter to his accountant, which the accountant dutifully forwarded to Britain’s Serious Fraud Office, Mills wrote,
I kept in close touch with the B people, and they knew my circumstances….They knew…quite how much the way in which I had been able to give my evidence (I told no lies, but I turned some very tricky corners, to put it mildly) had kept Mr B out of a great deal of trouble that I would have landed him in if I had said all I knew.
Yet this matter presented a much greater problem for Tony Blair and his government than it did for Berlusconi, the alleged bribe-giver.
Berlusconi’s version of crony capitalism has not just been morally repugnant; it has also been bad for the Italian economy. In 2001, before Berlusconi returned to power, the telephone company Telecom planned to enter the television business, announcing plans to create a “third pole” that would compete with both Berlusconi’s television networks and the state-owned RAI. After Berlusconi’s election victory, they dropped the idea. In the meanwhile, the Pirelli Tire Company had taken over Telecom and—perhaps not coincidentally—bought a couple of money-losing businesses that had been part of Berlusconi’s financial empire. Privately, Telecom’s head told friends, “As long as the government sets the phone rates, I can’t afford to go against Berlusconi.” And so two key elements of the postindustrial economy—telecommunications and television—remained closed and uncompetitive markets, a situation symbolic of the overall stagnation of the Italian economy.
Italy in the early 1990s was one of the most dynamic countries in Europe, with a GDP and standard of living close to those of Great Britain. Since then, Italy has grown at half the rate of the UK and its economy is now more than 15 percent smaller. Not all of this is Berlusconi’s fault. Traditionally, Italy’s way out of economic distress had been to devalue its own currency, the lira, in order to make its own goods cheaper and more competitive, and indirectly to reduce wages. Locked into the single currency of the euro, this strategy was no longer available. Italy’s structural problems—high labor costs, an expensive pension system, government waste and inefficiency, the small size of Italy’s family-owned firms, and the low levels of research, development, and technology—became all the more resistant to change.
Italy fell behind the rest of Europe under the Berlusconi government. Between 1996 and 2001, years of center-left government and of the dot-com boom, Italy grew at an annual rate of 2.2 percent while the EU averaged 3.1 percent; in the Berlusconi years, Europe grew by 1.45 percent and Italy by just 0.35 percent. The gap between Italy and Europe grew from 0.9 to 1.1 percent. At the same time between 2001 and 2005, Italy sank from twenty-fourth in the world in competitiveness to forty-seventh, according to World Economic Forum rankings. Productivity and exports have fallen and the standard of living—above average for Europe in 2000—has dropped by 7 percent. Italy is last among the major countries of Europe in research and development, last in investments in technology, last in filing for scientific patents, and last in percentage of university graduates. In short, Italy in the Berlusconi era has become a more provincial and mediocre country.
Whatever government now takes over will have difficulty trying to reverse these long-term trends. Prodi, a professional economist, appears to understand the country’s problems, but his small majority and heterodox coalition may make it hard for him to undertake unpopular measures. Germany, which was near the bottom with Italy in the past ten years, has undertaken painful reforms that appear to be paying off. As Prodi notes in his 281-page program, Germany has improved its productivity so that its labor cost for each unit of goods produced went up by only 1 percent since 2000. In Italy labor costs per unit went up by 20 percent. Prodi has stated that he would like to lower the cost of labor by 5 percent but this will probably require painful choices.
He also said in one of the debates that he wanted to transform various forms of part-time and precarious jobs for young people into permanent ones with all the long-term protections that Italians have become used to. Prodi presides over a very diverse and weak coalition, with the support of members of the Confindustria on one end and, on the other, labor unions and the far-left party, Rifondazione Comunista, which caused his first government to collapse in 1998. Instead of supporting legislation he himself would have backed, Berlusconi did his best to cause the new government to fail.
One of the many tragedies of the Berlusconi era is that Italy genuinely needed a serious conservative movement to challenge some of the orthodoxies and rigidities of Italian life and to try to end the incestuous relationship between business and politics. This would have forced the center-left to come up with ways to make Italy’s welfare state more affordable, efficient, and less of a drag on the economy. Berlusconi, the country’s biggest monopolist, was the last person in Italy to undertake such a task. The tragedy of Berlusconi is greatest in fact for Italy’s right wing, which remains in a state of arrested development, utterly dependent on one man, his company, and its interests—a situation that seems likely to continue indefinitely. After Italy’s high court confirmed the election result, Berlusconi announced he had no intention of congratulating Prodi or recognizing the new government’s legitimacy. He vowed to stymie it in every way possible. “They won’t,” he said, “be able to govern; we will make them ineffective…. Without our consent in the Senate they won’t be able to pass a single bill.”
—April 26, 2006