Italian PM Silvio Berlusconi is probably the most hated man in Europe right now, and that’s not without good reason.
However, it is simply too easy to blame Berlusconi for the deep-seated problems at the heart of the Italian crisis.
The politician and media mogul is bungling his way through revelations about scandalous bunga bunga parties, fraud allegations, involvement with a teenage prostitute, charges of tax evasion, and any number of political scandals.
Clearly, these are the kinds of abuses that would unseat any American politician, but Italy is simply a very different place. His violations of the legal code have always been common knowledge.
From a 2001 article in the Economist:
Mr Berlusconi’s strongest claim is that many of the charges against him—whether of conflict of interest or of much greater crimes—have been known for years, and yet most Italians seem untroubled. In other words, though the judiciary may not agree, the court of public opinion finds him innocent.
Recent gaffes have triggered a public approval slide for Berlusconi, but it has long been apparent that he is not a trustworthy character.
Further, it would be silly to blame Berlusconi alone for the economic woes Italy has suffered. Italy’s debt problem is long-standing: it has maintained a public debt greater than 100% of GDP since 1992 according to the IMF (via Index Mundi).
Photo: Index Mundi
True, it was Romano Prodi and his centre-right government who can be credited for the debt control measures instituted in the middle of the last decade. Berlusconi’s love of tax cuts certainly has not helped his cause on the economic policy front, but he did introduce incentives to have more children and succeeded in saving big banks and companies at the onset of the financial crisis in 2008.
Berlusconi even kept Giulio Tremonti — the finance minister who has been endorsing debt reforms for years — in office, despite their long history of political quarrels.
However, Prodi failed to make any lasting progress towards reform and growth, and incensed Italians with tax hikes. Further, neither government has been able to truly tackle the problems at the heart of Italy’s crisis — growth and lack of competitiveness.
In fact, it is even possible to credit Berlusconi for his euro-wide political policy. In 2008, he was lauded for uniting eurozone leaders and encouraging coordinated action during the last financial crisis, rather than the domestic action other leaders had advocated.
From a 2008 Guardian editorial:
Berlusconi, after having tried to create a European fund to save struggling banks, successfully persuaded the EU to coordinate its response to the crisis. He also pointed out how important it was to take action on Euribor inter-bank lending rates in order to build banks’ confidence.
Clearly Berlusconi is far from an ideal leader, however, it’s unclear that anyone else would have done much better. Bickering between the strong Northern and ailing Southern halves of the country have long complicated attempts to spur growth, and both major political parties have failed to stem rampant corruption and tax evasion.
Sure, Berlusconi can come off as dimwitted and impolitic, but he’s no exception among Italian (and even global) politicians. And with on-and-off protests over austerity measures, there is little indication that Italians are truly ready to bite the bullet of more sweeping change, regardless of who takes office. Not to mention that Berlusconi is not the only Italian politician with a shady past.
The markets may hate the man, but if he goes they could loathe his successor just as much.