Is Silvio Berlusconi losing the plot?

Marco Niada
23 March 2006

Why is Italy's prime minister – a man who controls so much of his country's media and who has, in the view of historian Alexander Stille, "transformed Italian life into the world's longest-running reality television show" – still trailing in the opinion polls? Just over two weeks before the elections to both houses of parliament on 9-10 April, Berlusconi is a few percentage points behind his rival, Romano Prodi, in most opinion polls. While the gap is small and can still be reversed, it has been there for weeks.

Berlusconi is fighting hard, dashing between TV studios and various gatherings to defend his government's record and to assure voters that he is the candidate capable of delivering. He accuses Prodi – a former prime minister and former president of the European commission – of being the front-man of a political coalition that is hostage to a communist mentality, driven by social hatred and opposed to entrepreneurship, progress and individual freedoms.

Those arguments worked last time round, in May 2001, but the propaganda machine is less convincing now. On 14 March, a TV duel between the two candidates ended in victory for Prodi. While the soft-spoken Bolognese economics professor gave a balanced performance, it was Berlusconi's poor show that tipped the balance. He went on for ninety minutes, flashing a grin, scribbling with a pen as he talked, replying to Prodi over a dozen times with a stock phrase ("Exactly the opposite is true"), and baffling the audience with statistics that were difficult to verify.

Berlusconi also complained about the rules of the debate (which he had accepted beforehand), which gave equal time to each candidate, saying he needed more "to explain our achievements to the country". In the end, he upset even his biggest allies in government, foreign minister (and deputy prime minister) Gianfranco Fini and Pierferdinando Casini, speaker of the chamber of deputies, the lower house of parliament.

Marco Niada is the London correspondent of the Italian financial daily Il Sole 24 Ore.

Also by Marco Niada in openDemocracy:

"Farewell Agnelli" (February 2003)

"Parmalat: Italian capitalism goes sour" (December 2003)

"Afghanistan: no time to lose" (April 2004)

"Italy's tragic democracy"
(August 2005)

On 18 March, at a gathering of the main association of Italian businesses (Confindustria), Berlusconi lashed out against those in its leadership who back the centre-left; they represent larger companies, Berlusconi claimed, whereas small, hard-working businesses are on his side.

According to the Italian news agency Ansa, Berlusconi singled out Diego Della Valle, chief executive of Tod's, the luxury shoe company, saying: "I see that Mr Della Valle is shaking his head. If a businessman has lost his head and supports the left, it means he has a lot of skeletons in the cupboard and has plenty of things to ask forgiveness for." Della Valle later told journalists that Berlusconi was "on the verge of a nervous breakdown."

Following the bitter spat, Della Valle resigned from the Confindustria board, saying he wanted to make clear that his negative views of the prime minister were not necessarily those of the board. Berlusconi retorted that Della Valle had been asked to resign – and added that he had "absolutely nothing against" Della Valle. The row released shockwaves within Confindustria that culminated in a unanimous decision on 23 March to rally behind its president, Luca di Montezemolo.

If, despite his vast media exposure, Berlusconi loses the election, he may at least be proved right in saying that he has no monopoly on information in Italy. Whatever the truth, it will be shown that in an advanced and open democracy, ownership of the media to gain and retain power is a waste of money. True dictators not only rely on a monopoly of disinformation, but also on the isolation of the population from the outside world and on such state instruments as the army, the police and the secret services – which, fortunately, are out of fashion in the west.

Even if many Italians remain addicted to Berlusconi's personal version of the 1998 film The Truman Show – in which the main character's "real" life is also a non-stop TV serial – reality is still key. The hard reality in Italy is the state of the economy, and that will determine the election result.

What Italy needs

Under Berlusconi, the economy has worsened. The Italian share of world trade has hugely shrunk. In January 2006, the trade deficit was the worst since 1991. Italian industry is stuck in the middle of change, depending on traditional sectors such as textiles, clothes, shoes and mechanics – all of which are threatened by competition from China. Services are underdeveloped. Italy lagged behind its European peers for many years and ended up in 2005 with zero growth. The forecast for 2006 is for about 1% growth, half the rate of Euroland. Italy has tumbled down the ladder of world competitiveness. Public debt, the nation's Achilles' heel, has grown for the first time since 1994, from 103.8% to 106.4% of GDP. Italians living on a fixed income are worse off: the euro, introduced in 2002, hit consumers on basic items, such as food and clothing.

Also on Silvio Berlusconi and Italian democracy in openDemocracy:

Sarah Pozzoli & Mario Rossi, "The fall and rise of Silvio Berlusconi" (April 2005)

Sarah Pozzoli, "Who rules Italy?"
(June 2005)

Geoff Andrews, "Italy's election: no laughing matter"
(February 2006)

Pierleone Ottolenghi, "Dear Mr Bush…" (February 2006)

Many problems are structural and need a drastic cure. Berlusconi has continued to blame "Prodi's euro", which replaced his beloved lira. But he has kept Italy in Euroland and, after five years in government, he is accountable. He has done positive things, such as increasing flexibility in the labour market, reducing unemployment to 7.5% and initiating big public works (though some are questionable). But not much else has been accomplished, especially on market liberalisation and competition, taking into account that Italy needs a more open economy.

The solution for a country defined by cosy capitalism, professional guilds, labour protection, lack of transparency, and contempt for consumers and shareholder minorities is shock therapy. Italy needs a massive injection of foreign capital and labour to stimulate a declining, ageing and defensive population. But has Berlusconi been the herald of free and fair competition? While he's been a formidable fighter for his own interests, he hasn't been keen to pass on any lessons to his fellow Italians. In fact, the majority of those who voted for him apparently did so to maintain the status quo.

Silvio Berlusconi can hardly be seen as a man of change. Those who voted for him to get a more market-friendly and dynamic Italy may be tempted to abstain this time round. And as the centre-left will have trouble passing new free-market reforms, many experts fear that, whatever the outcome of the April poll, Italy's prospects remain pretty grim.

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