Can Berlusconi Deliver On Debt-Crisis Promises? | WAMU 88.5 - American University Radio
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Can Berlusconi Deliver On Debt-Crisis Promises?

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If Greece is the first act in the eurozone's debt-crisis drama, the second act would be Italy's economy.

Italian Prime Minister Silvio Berlusconi is expected to go before world leaders Thursday at the G-20 economic summit in France with a vague list of anti-crisis measures that are not likely to calm nervous markets or satisfy his EU partners.

Berlusconi promised European leaders last week that he would come up with solid proposals to show Italy can reduce its mountain of debt, stimulate its economy and avoid a bailout. But after feverish emergency meetings and a late-evening cabinet session in Rome, all that emerged was a terse statement with no real details about any of the measures decided.

Instead, it just listed proposals such as divesting state-owned real estate, privatizing local public companies and encouraging investment in infrastructure. The measures won't go into effect immediately, but will be tacked on as amendments to an economic stabilization bill currently before parliament.

Berlusconi had also promised German Chancellor Angela Merkel and French President Nicholas Sarkozy radical measures including making it easier to fire workers, reforming the pension system and widespread privatization of state-run enterprises.

These extremely contentious issues have begun to undermine the fragile government coalition. In the past year, Berluconi has been accused of holding on to a slim majority by offering government posts to wavering members of parliament.

Italian commentator Beppe Severgnini believes the radical proposals would be a much harder sell.

"To slash red tape, to reform the justice system, to sell off state assets, and to make hiring and firing much easier — there is no way you can pass such an agenda with a majority of two people who are with you only because you promised them minor government jobs," he said. "No way."

Berlusconi, who has been plagued by legal problems, is facing increasing pressure to step down and hand power to an emergency government. Over the past year, he also has become more and more the object of derision both at home and abroad.

Last week, his dismissive remarks about the euro irritated his EU partners and triggered more market turmoil.

"The euro is a strange currency which has convinced no one because it belongs to more than one country but does not have a bank of reference and guarantees," Berlusconi said.

Such comments have not helped Berlusconi's international standing. In fact, Merkel has started to consult directly with Italy's chief of state, Giorgio Napolitano, for reassurances about Italy's determination to lower its debt through structural reforms and budget cutting.

In an unusual move, Napolitano began political consultations this week to gauge how much support Berlusconi really has in parliament, though the president does not have the power to fire the prime minister.

One of the politicians consulted was centrist opposition leader Pierferdiando Casini, who said that all sacrifices are useless as long as Berlusconi stays in power.

"Let's face facts," Casini said. "There is the prime minister's lack of credibility and the economic crisis of a country that's not growing and has to make sacrifices to get back on track. We assured chief of state Napolitano that we're willing to try to solve both problems."

Casini has joined forces with the large leftist opposition in proposing an emergency government possibly headed by a prestigious technocrat.

James Walston, professor of political science at Rome's American University, noted that the only way Berlusconi can be ousted is if he is loses the support of his own MP's.

"If enough people in parliament say, 'We've had enough. Silvio, please step down because otherwise the country will go down,' then he will be forced to do so. But not until then," Walston said.

Still, the cracks are widening. On Wednesday night, reports circulated that six lawmakers from Berlusconi's party have asked the prime minister to act as a real statesman and, for the good of the country, resign from office.

Copyright 2011 National Public Radio. To see more, visit http://www.npr.org/.

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