Has Berlusconi Finally Run Out of Political Lives?

http://www.nytimes.com/2013/09/09/world/europe/has-berlusconi-finally-run-out-of-political-lives.html

Version 0 of 1.

ROME — Behind the high gates of his lavish 16th-century villa in Italy’s wealthy Po Valley, Silvio Berlusconi is plotting. His People of Freedom party is currently the most popular in Italy. He just won a victory by getting rid of a disliked property tax. And yet he could be facing his political end.

Mr. Berlusconi, 76, the polarizing former prime minister and billionaire media mogul, has dominated Italian politics for two decades, even as he maneuvered past sex scandals and corruption trials. Then, in July, he ran out of maneuvering room: Italy’s highest court upheld a prison term against him for tax fraud. On Monday, a parliamentary commission will debate whether to strip him of his Senate seat.

And that has thrown Italian politics into a state of turmoil that threatens the survival of the country’s fragile coalition government while also posing risks to the tentative economic recovery under way in Europe. Analysts warn that political instability in Italy, the Continent’s third-biggest economy, could unsettle financial markets, further sour investor confidence and possibly stoke the angry brand of anti-austerity populism that has periodically erupted across southern Europe.

Italy’s postwar politics have always had an operatic flourish, with governments regularly falling, even as the rest of a bemused Europe watched from a distance. But the travails of the euro and the fitful project of European integration have changed that: just as a banking crisis in tiny Cyprus can threaten the stability of the 17-nation euro zone, so now must Brussels and Berlin be wary of any outward ripples from Italy’s political machinations.

“It could potentially be very significant,” said Simon Tilford, chief economist at the Center for European Reform in London. “Political instability in Italy is more of a concern than in Spain, Portugal or Greece.”

With much at stake, the question reverberating through Italy’s news media is, “What will Berlusconi do?” He has remained mostly secluded at his villa outside Milan since making an emotional appearance in Rome on Aug. 4, a few days after his conviction. Near tears and surrounded by supporters, Mr. Berlusconi said his party would continue to support the coalition government even as he furiously denounced his conviction.

But that pledge is now on the table, as the parliamentary commission prepares to consider his expulsion from the Senate. Under a 2012 law, anyone convicted of a crime carrying at least a two-year sentence must be barred from public office for several years. Mr. Berlusconi would also lose certain legal protections afforded to lawmakers — a significant blow, given his regular brushes with corruption accusations and contentious history with the country’s magistrates.

“Once he is not a member of Parliament, any prosecutor can arrest him for any reason,” said Lucio Malan, a senator with Mr. Berlusconi’s party, who said he believed that many magistrates were colluding with left-leaning political parties against the former prime minister.

Mr. Malan and other supporters say the 2012 law should not be applied, given that the tax case originated several years earlier. And other Berlusconi loyalists have bluntly warned that stripping him of his Senate seat could amount to political war: he might withdraw his party’s support for the coalition and bring down the government.

The coalition, led by Prime Minister Enrico Letta, is already an awkward marriage between Mr. Berlusconi’s center-right party and its archrival, the center-left Democratic Party, as well as smaller parties. After inconclusive national elections this year, President Giorgio Napolitano, the 88-year-old senior statesman of Italian politics, midwifed the government into existence in the name of stability and reviving the moribund economy.

Under Italy’s Constitution, only the president can call new elections, and Mr. Napolitano has said that snap elections now would be economically and politically destructive. If Mr. Berlusconi pulls out, Mr. Napolitano would most likely try to form a different coalition government.

“For him, stability has become the most important aspect of Italian politics, more than reform,” said Sergio Fabbrini, a political scientist and the director of the Luiss School of Government in Rome. “Instability means an economic loss of huge proportions.”

Mr. Napolitano also does not want to jeopardize efforts in Parliament to approve sweeping electoral changes. Italy’s current electoral law, including aspects instituted during Mr. Berlusconi’s era as prime minister, is widely criticized for being unrepresentative. Later this year, an Italian court is expected to rule on the constitutionality of the system, creating a potential crisis: What would happen if Mr. Berlusconi manages to force new elections but, in the interim, the court rules that the electoral system is unconstitutional?

Italian voters have already signaled their anger and disillusionment with the political class. In parliamentary elections in February, the upstart Five Star Movement, led by the former comedian Beppe Grillo, won a startling 25 percent of the ballots in what was widely perceived as a protest vote. Italy’s youth are especially alienated, having endured rampant unemployment and stagnant wages.

Indeed, many analysts say Italian politics are nearing a generational inflection point that coincides with troubles facing the aging Mr. Berlusconi. Recent polls show the People of Freedom party leading other parties, yet Mr. Berlusconi’s prospects of winning a new round of elections are considered challenging. Many analysts say much will depend on whether Matteo Renzi, 38, the charismatic mayor of Florence, can overcome internal antagonisms within the Democratic Party to become the center-left’s next candidate for prime minister.

“Renzi has many defects,” said Roberto D’Alimonte, a political scientist and specialist on Italy’s electoral system. “But he can put an end to the Berlusconi era.”

Some analysts say Mr. Berlusconi’s threats to bring down the government would be likely to dissolve if an accommodation could be reached. Some of his supporters have suggested a presidential pardon, but Mr. Napolitano has not indicated he would offer one.

That has left Mr. Berlusconi roughly five weeks away from having to start serving his sentence. His conviction carries a four-year prison term, which was reduced to a single year under a law aimed at reducing prison overcrowding. He also has the right to decide by Oct. 15 whether he will serve his time in jail, under house arrest or through community service. He does not want to serve his sentence in any manner, regarding it as unjustified, yet his opponents insist that his political power cannot exempt him from the law.

“For us, this is a matter of rule of law,” said Felice Casson, a senator from Venice with the Democratic Party, who nonetheless smiled at the thought of his party’s nemesis doing court-ordered manual labor. “He could clean up the Venice canals. There are convicts on lesser crimes in Venice who do that.”

Now, though, the question is what Mr. Berlusconi’s next step will be and whether he will make trouble beyond Italy. Last Friday, during the Group of 20 meeting in Russia, Prime Minister Letta told reporters that the world was looking to Rome with concern.

“There’s lots of interest in Italy, that Italy plays a role and there is stability,” Mr. Letta said, according to the Italian news agency ASNA. “There’s a need for a stable Italy in political, financial and economic terms.”

One Berlusconi loyalist, who has worked closely with him for years, described the former prime minister’s mood as one of “bitter outrage.” Some in his party are lobbying for a full-out political fight, while others warn that doing so could inflict damage on his businesses and his party.

“What worries him the most is his legacy,” said the loyalist, who spoke on the condition of anonymity because of the delicacy of the matter, saying that Mr. Berlusconi was furious over the verdict. “He’s like a Navy Seal. He will never give up. Even though everybody says, ‘That’s it, we got him.’ But he’ll never give up.”

<NYT_AUTHOR_ID> <p>Gaia Pianigiani contributed reporting.