The Salacious and the Sober Collide, Illustrating Hurdles for Italy’s Government

http://www.nytimes.com/2013/05/18/world/europe/salacious-and-sober-collide-illustrating-hurdles-for-italys-government.html

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ROME — A young Moroccan woman embroiled in a sex scandal with former Prime Minister Silvio Berlusconi took the witness stand on Friday, recounting wild parties in which an attractive politician once dressed up as a nun and performed a striptease for Mr. Berlusconi.

The same day, Italy’s new prime minister, Enrico Letta, announced that his three-week-old government would suspend a much-reviled property tax on first homes in an effort to bring some oxygen to the country’s economy, which is in its longest recession since the 1970s.

The juxtaposition between the testimony of the Moroccan, Karima el-Mahroug, nicknamed Ruby Heart-Stealer, with whom Mr. Berlusconi is accused of paying to have sex while she was a minor, and the sober talk of taxes perfectly captured the constraints on the fragile governing coalition. Its success hinges as much on Mr. Berlusconi’s legal entanglements as it does on Mr. Letta’s ability to steer Italy out of the austerity demanded by Europe’s procedures on excessive deficits.

“Between Ruby and property tax, that is the path of this government,” said Marco Damilano, a political columnist for the weekly newspaper L’Espresso.

Mr. Berlusconi, 76, came back from the political dead in December, when he brought down the government of Mario Monti, the technocratic prime minister, by pledging to abolish the same property tax that Mr. Letta said he would suspend.

The move was widely seen as a compromise by Mr. Letta and Mr. Berlusconi’s party, which had threatened to bring down the new government if the tax was not lifted.

In recent days, Mr. Berlusconi has turned up the volume on his attacks on the judiciary, which he has long accused of conducting a left-wing witch hunt against him.

Such talk provided the soundtrack to the years when Mr. Berlusconi was in power, but today it puts strains on the fragile coalition. The current government came to power under duress after inconclusive elections in February, and it unites for the first time Mr. Letta’s center-left Democratic Party, which is fragmented internally and united only in its opposition to Mr. Berlusconi, with Mr. Berlusconi’s center-right People of Liberty party.

Even as Mr. Letta, at 46 one of the youngest prime ministers in Europe, has tried to set an economic agenda for a country facing growing unemployment, the tensions within the coalition have been rising with every court date, as Mr. Berlusconi lashes out at judges, while politicians from the center-left say he should be banned from public office.

“The central problem with the government is that, unlike other grand coalitions, it was formed without agreeing on a program, so it lives day by day,” Mr. Damilano said.

The lack of agreement has often made it appear as if Mr. Berlusconi’s personal problems are the nation’s chief priority. Newspapers regularly devote as many pages to changes in his legal team’s strategy as they do to the government’s economic agenda, and television stations run polls on whether people think Mr. Berlusconi’s legal woes could bring down the government.

“Unfortunately, the most important thing is the program of Berlusconi,” said Gianfranco Pasquino, a political science professor at the School of Advanced International Studies at Johns Hopkins University in Bologna. “But the two more important points are to reduce taxes on labor and pay the businesses that are owed money by the state.”

On Friday, Ms. Mahroug gave her first sworn testimony in a trial in which several associates of Mr. Berlusconi — including Nicole Minetti, the former Lombardy regional politician who Ms. Mahroug said had dressed up as a nun and stripped at a Valentine’s Day party — are accused of recruiting her and several other women as prostitutes. They deny the charges.

Ms. Mahroug said that at other parties, one woman once wore a mask of President Obama while another donned a red wig and a court gown, mocking Ilda Boccassini, the Milan magistrate who is leading the prosecution against Mr. Berlusconi in the sex scandal trials. She added that the in-house disco in Mr. Berlusconi’s villa had a pole for erotic dancing.

“I was surprised to go to the house of the prime minister,” Ms. Mahroug said, according to a video of her testimony. “It was a really strange thing for me. It didn’t seem real.”

In a separate but related trial, a lower court in Milan is expected to rule next month on whether Mr. Berlusconi paid for sex with Ms. Mahroug when she was under age and lied to cover it up. Both the former prime minister and Ms. Mahroug deny any sexual contact.

A conviction for Mr. Berlusconi would still need to be upheld in two rounds of appeals, but it would place significant strains on the government.

While the “Ruby” trial has made the most headlines, analysts say that Mr. Berlusconi is even more concerned about a case in which he and several associates are accused of setting up offshore companies to buy broadcast rights to American movies and falsely declaring the income to avoid taxes.

This month, an appeals court upheld a lower-court conviction against Mr. Berlusconi, and Italy’s highest court is expected to rule in that case as soon as this year. If he is definitively convicted, it is unlikely that Mr. Berlusconi will go to jail, because of his age. But he would be barred from holding public office for five years, because parliamentary immunity can be lifted after a definitive sentence.

While Mr. Berlusconi is fighting in court, Mr. Letta is fighting to convince Italians that the era of austerity is over, while also trying to convince European leaders that his government will stick to the belt tightening required to keep Italy’s budget deficit below the European limit of 3 percent of gross domestic product.

The property tax on first homes that was suspended this week was originally supposed to take effect in June. The government also pledged to add one billion euros to a fund that finances benefits for workers in paid furlough, a program aimed at keeping unemployment down. Italy’s unemployment rate is 11 percent, and it is 38 percent for young people.

In the Milan court on Friday, Ms. Mahroug said she had visited Mr. Berlusconi’s villa outside Milan half a dozen times and each time was given an envelope filled with 500-euro bills.

<NYT_AUTHOR_ID> <p>Gaia Pianigiani contributed reporting.