Farewell to Belusconi

Ciao! Senators expel Berlusconi from Parliament, remove immunity

The Italian Senate has expelled ex-Premier Silvio Berlusconi from Parliament with immediate effect over his tax fraud conviction. Together with his position in Parliament, the ex-premier also lost his immunity. However this decision does not mark the end of his political career.

Italian PM wins confidence vote

Silvio Berlusconi makes humiliating climbdown in Italian parliament

Prime minister Enrico Letta wins confidence vote after retreat by Il Cavaliere in face of MPs' rebellion

The Guardian,

2 October, 2013

Even before he'd started to speak, the signs were of a performance that lacked his usual panache. To begin with, the microphone that Silvio Berlusconi picked up to address the senate didn't work properly. Once it did, his speech was uncharacteristically flat. There were no histrionics or garrulous jokes – just a final sentence which, in a few rather sheepish words, spoke volumes.

The man who had dominated Italian politics for two decades had been forced into a humiliating climbdown by a rebel faction of his own MPs. Outfoxed, out of luck and abandoned as never before, he looked tired and downcast. But he brought a smile and incredulous chuckle to the face of Enrico Letta, the prime minister.

"Italy needs a government that can carry out structural and institutional reforms which the country needs to modernise," said Berlusconi, his hands clasped in front of him, an Italian flag pin on his lapel. "We have decided, not without internal strife, to vote in confidence."

There was a burst of applause. But Il Cavaliere, as the Italian media like to call the billionaire former prime minister and convicted tax fraudster, had nothing to cheer about.

In a fittingly dramatic denouement to a political saga that a former minister likened to a tragicomedy and an MP said was more like a farce, Italy's government crisis – a week of mounting dread and trembling markets that had risked scuppering the grand coalition and plunging the eurozone heavyweight into turmoil – was over, just like that.

Letta, the centre-left leader of a government which since its inception has been plagued with tensions and ideological splits, went on to win the senate confidence vote with a sweeping majority. Only 70 of 305 MPs voted against; 235 MPs voted for. Berlusconi – the man who triggered the crisis and spent days clamouring for the government's downfall – was one of them.

Later, in the lower house of parliament, a vindicated Letta said it was time to call a halt to the threats and ultimatums which had dominated the coalition since Berlusconi's first definitive criminal conviction on 1 August.

"Italy needs there to be no more blackmail of the 'do this or the government falls' sort," he said. "Italy doesn't need any old government, but a government at the height of its abilities with a clear majority supporting it."

The prospect of more stability was music to the markets' ears. The FTSE MIB was the best-performing stock market index in Europe, up 0.7%, while Italian debt strengthened in value, pushing down borrowing costs and sending the yield on Italy's 10-year bonds to 4.37% from as high as 4.74% on Monday morning. They were not the only ones to be relieved. Ever since ominous drumbeats started sounding last week, concern had grown not only among Berlusconi's opponents but large parts of Italian society about what lengths he was prepared to go to in order to – in Letta's words – "protect his personal interests".

Facing imminent expulsion from the senate and the enforcement of his commuted one-year sentence, the recently convicted People of Freedom (PdL) party chief had insisted that his motive for suddenly withdrawing his ministers from the government was a sales tax hike imposed by the coalition that he had vehemently opposed.

Even by Berlusconi's standards, however, this was hard for Italians to swallow – even, it transpired, for most of the very ministers he had ordered to resign. One by one, four of them lined up to voice their misgivings. Their exact status was unclear; La Repubblica, translating the uncertainty into punctuation, referred to one of them as an "ex(?) minister". By Tuesday night, however, in the latest step in an increasingly bizarre political dance, Letta made an announcement to the effect that the five could resign all they liked; he was not accepting their resignations.

In the senate on Wednesday, the stage was set not only for a showdown between Berlusconi and - as Il Sole 24 Ore wrote – "the whole world – Europe, the United States, the markets, the [semi-official Vatican newspaper] Osservatore Romano". It would also be a vital test of whether the leader of what has always been a personal party built around Berlusconi the man - his success, his power and his bravado - still called the shots.

As it turned out, he did not – not, at least, in the way he once would have done. With his family newspaper condemning the flabbergasting "patricide" of Angelino Alfano, the PdL secretary widely seen as Berlusconi's heir who emerged as leader of the rebels, the 77-year-old arrived at the senate around 25 minutes into Letta's make-or-break speech

"Italy is running a risk that is potentially fatal, without remedy," the prime minister told MPs, warning them of the damage to the country's economy and image that a government collapse and eventual fresh elections would inflict. "Thwarting this risk, to seize or not seize the moment, depends on the choices we will make in this chamber. It depends on a 'yes' or 'no'."As he sat in Palazzo Madama, his expression grim, Berlusconi, the longest-ruling prime minister Italy has known since the second world war, was greeted by a succession of supporters, many of them among the so-called PdL "hawks". One of them, a former MP named Daniela Santanchè, a loyalist so fierce she is known as "the pythoness", was reported to have offered on Sunday to give Alfano her "head on a platter" if it helped her boss.

But as the day wore on it became clear that a significant portion of Berlusconi's party was going to defy his wishes and vote for the government to continue. Arithmetic on a scribbled piece of paper that Alfano displayed had 32 senators voting with their leader, 24 absenting themselves, and 25 against him. With such numbers, Letta was home and dry. And Berlusconi, not long after the party line was voted and confirmed to be for the "sfudicia", then got up in parliament and performed a screeching U-turn.

The prime minister, perhaps, could be forgiven a small smile. Later, the editor of La Stampa, tweeted him reminding him that, on Sunday, Letta had likened Italian politics to Groundhog Day, the film in which every day turns out the same. After all that, Mario Calabresi seemed to suggest, Italy had ended up with exactly the same government, with the same problems, as before.

But, said Vincenzo Scarpetta, an analyst at Open Europe, it would be a mistake to think that Wednesday's vote changed nothing. On the one hand, the set-up that Letta has been left with is still far from ideal and "there are still doubts about this government's ability to push forward with painful, unpopular measures," he said. Many suggested Letta would have preferred to have kept Berlusconi out of the majority altogether, thus giving himself a more unified government.

On the other, Scarpetta said, Berlusconi's ability to pull strings and dictate events had definitely been compromised. "He clearly comes out weaker from this. The initial situation when they formed the government was that he would be able to pull the plug on it whenever he wanted, because the government depended on his support. But now, that's exactly what he tried to do … and it didn't work," he said. Analysts said that what happens to the centre-right now will be key in determining whether this is the beginning of the end for Berlusconi, or just a major setback. On Wednesday night, in the lower house, a group of 26 PdL deputies had reportedly signed up to a new centre-right group led by Alfano. Berlusconi loyalists were expected to stay with him under the relaunched Forza Italia party name. "Of course, he remains the leader of the party," said Scarpetta. "We will just have to see what happens to the party."

Italy on the brink

Bonds and shares dive after Berlusconi orders five ministers to quit plunging government into chaos

• Former premier's orders have left Italy without a functioning government
• Shares in broadcaster Mediaset, controlled by Berlusconi, down nearly 5%
• Country could face elections creating more long term political uncertainty

Daily Mail,

30 September, 2013

Italy is on the verge of political meltdown, with a breakaway faction in Silvio Berlusconi’s party providing the only hope for the government’s survival.

The billionaire sparked chaos at the weekend when he ordered his ministers to resign from a coalition with the centre left, leaving the government close to collapse.

The threat of fresh elections, and months more turmoil, in the Eurozone’s third largest economy, has already scared investors, with warnings that Italy’s BBB+ credit rating is at risk of downgrade.

Former premier Silvio Berlusconi has left Italy without a functioning government after ordering members to quit, causing bonds and shares to dive. Berlusconi, pictured last week arriving at his private residence, in Rome, faces eviction from parliament over tax fraud

Berlusconi’s centre right People of Liberty party has ruled in a uneasy coalition with the centre left since April. Prime Minister Enrico Letta faces a vote of confidence in the Parliament tomorrow.  If all Berlusconi’s MPs vote against him, the government’s majority will collapse.

But a rebel faction within People of Liberty may provide salvation for Letta, a party source has claimed. If the dissidents support the government a workable majority could be cobbled together, preventing the collapse of the administration.

Rumours of the rebellion slightly revived prices of Italian stocks and bonds.

The yields on Italy's 10-year bond, a good indicator of long-term sentiment towards Italy, spiked to 4.73 per cent early on Monday from 4.42 per cent on Friday, the highest since June but well below a 7.5 per cent yield hit when Italy came on the verge of default in late 2011.

Shares in Milan's blue-chip FTSE MIB plunged 2.5 per cent minutes after opening, with banking stocks particularly heavy. Shares in broadcasting group Mediaset, controlled by Silvio Berlusconi, were down nearly 5 per cent. 

Italian Prime Minister Enrico Letta will go before parliament on Wednesday and hold a confidence vote to verify what is left of his parliamentary backing.

The outcome of a confidence vote is uncertain as some of Berlusconi's lawmakers from his centre-right party have shown increasing unease over his shock decision to withdraw government support. Minister Gaetano Quagliarello told an Italian newspaper on Monday there was talk to form another centre-right party.

Italy's bonds are at a three-day low, and shares in big companies have fallen. It's goverment could face elections, causing more political and market uncertainty. Pictured Italy's Upper house, in Rome

'The resignation of the centre-right ministers will clearly increase volatility in the government bond market, similar to what happened between February and April, before the current government was formed,' Goldman Sachs analysts said, adding the crisis threatened the few reforms Letta's coalition was trying to push through.

Letta enjoys a commanding majority in the lower house but would need to win over a couple of dozen senators from Berlusconi's PDL party or opposition parties including the anti-establishment 5-Star Movement to be able to be sure of parliamentary support.

'Markets have grown accustomed to Italy's dysfunctional politics, but there's a sense that things are now spinning out of control,' said Nicholas Spiro, who runs specialised consultancy Spiro Sovereign Strategy.

Collapse of Italian government

Berlusconi's ministers resign from government

Italian centre-right leader Silvio Berlusconi pulled his ministers out of the ruling coalition today, effectively bringing down the government of Prime Minister Enrico Letta and leaving Europe's third-largest economy in chaos

Stuff,

29 September, 2013

The announcement, which will likely lead either to new elections or the formation of a new coalition, came a day after Letta challenged Berlusconi's party to support him in a confidence vote in parliament following weeks of tension.

Yesterday, the cabinet failed to agree vital fiscal measures to bring the budget deficit within European Union limits, leaving the fragile coalition of traditional rivals from the left and right near total breakdown.

Tensions between the two sides had been rising for weeks following moves to expel Berlusconi from parliament after his conviction for tax fraud last month.

"The decision taken by Prime Minister Enrico Letta to freeze government activities ... is a serious violation of the pacts on which this government was formed," Berlusconi said in a statement.

This week PDL lawmakers threatened to walk out of parliament if he is expelled from the Senate over the conviction.

The ministers' resignations will further delay meaningful reforms in Italy, which is struggling with a two-year recession, a 2 trillion euro public debt and youth unemployment of around 40 percent.

The political convulsions have increasingly worried investors, although with the European Central Bank guaranteeing stability in the markets, there has so far been less panic than seen during previous crises.

Italy's borrowing costs hit a three-month high at an auction of 10-year bonds on Friday, while the premium investors demand to hold Italian government debt rather than German paper widened to about 267 basis points from under 250 at the start of the week.

The Euro crisis

Italy election sparks fresh fears for euro

Result projections point to a hung parliament as a former comedian leads the Five Star Movement to the national stage

the Guardian,

25 February, 2013

Italy threatened to pitch the eurozone into fresh turmoil on Monday night as the result of its general election pointed to a hung parliament and confirmed the anti-establishment Five Star Movement, led by a comedian-turned-politician, had exploded on to the national stage.

With almost all the votes counted, the centre-left had a lead in the race for the lower house, the chamber of deputies, where it would be assured an outright majority under electoral rules. It was also reckoned to have more seats in the senate, beating a resurgent right led by Silvio Berlusconi by a narrow margin. However, the figures and estimates given did not include the results of four overseas constituencies.

Neither right nor left had an outright majority in the upper house, where the balance will be held by Beppe Grillo's Five Star Movement (M5S). Grillo has ruled out supporting either side in his drive to sweep away Italy's existing political parties and the cronyistic culture they support – a sentiment he appeared to reiterate after the countby insisting the M5S was not planning on "any stitch-ups, big or small" and lambasting Berlusconi's voters for committing "a crime against the galaxy".

In an audio message broadcast live online, Grillo said that, after his movement's "exceptional" results, the mainstream parties were "finished, and they know it". "We've started a war of generations … They've been there for 25 to 30 years and they've led this country to catastrophe," he said. "We will be an extraordinary force … We will be 110 inside [the parliament] and several million outside."

Exceeding even the most adventurous pre-electoral predictions, the M5S emerged as Italy's biggest single party in the chamber – a result that will send shockwaves through the eurozone and beyond. Grillo boasted it had achieved its prominence in the space of little more than three years, "with no money and no [state] funding." However, Grillo's movement lagged the two big alliances in the number of seats because it is running alone and not in a coalition.

The result indicated that fresh elections were a strong possibility and, at best, foreshadowed a weak government unable to pass the tough reforms Italy needs to enhance its grim economic prospects.

Pier Luigi Bersani, the leader of the centre-left Democratic Party, appeared to signal that his party would attempt to form a government. "It is clear to everyone that a highly delicate situation is developing for the country," he was quoted by the Ansa news agency as saying. "We will manage the responsibility these elections have given us in the interest of Italy."

Gianfranco Fini, a former foreign minister whose party ran as part of outgoing prime minister Mario Monti's centrist alliance, said: "I think the worst is yet to come for Italy."

European leaders have been desperate to see a stable government in Italy, and are likely to be horrified at the triumph of populism in the eurozone's third biggest economy.

The likely results threaten to reignite the euro's instability after months of relative calm. The markets took fright: the "spread" between Italian and German government bonds, which increases in line with investors' concern over Italy's ability to repay its debts, shot up. Having started the day at 258 basis points, it reached 293.

The Milan bourse had a rollercoaster session, closing 0.73% up – before the full degree of uncertainty was apparent. Meanwhile the Dow Jones fell 216.4 points, or 1.55%, to end at 13,784.17.

Grillo, and to a lesser extent Berlusconi – both showmen politicians – were the victors. The understated Bersani saw an initially substantial lead in the polls slip away. Angelino Alfano, named by Berlusconi as the right's prime minister in case of victory, said the result was "very positive – I would say extraordinary, even – and we are very satisfied".

But the biggest loser of all was the sober, professorial Monti. His ill-assorted alliance of free-market liberals, Christian Democrats and former neofascists appeared to have garnered barely 10% of the vote. Its failure was the price of the tax increases and unpopular reforms that Monti's administration imposed after taking office in November 2011.

Monti insisted he was content with the result, having created a programme that had presented voters with a "realistic" way forward for the country. "Ours is a satisfying result," he told a press conference.

But his dismal showing could have a decisive impact on the prospects for a stable government because his bloc seems to be unable to furnish either of the two main alliances with the seats needed for a senate majority.

A representative of the M5S avoided ruling out a deal to elect the country's next prime minister. Alessandro Di Battista told the news agency Ansa: "We are waiting for the official figures. First, we need to know how many we are – count ourselves up. Then we'll meet, listen to the web and decide what to do."

The projections suggested the movement could have more than 50 seats in the 315-seat senate and well over 100 in the 630-seat lower house. While paying tribute to Grillo's contribution to the M5S's result, Di Battista stressed the movement's elected representatives would take their decisions independently of him.

Shunning television and other established media, Grillo embarked on a barnstorming tour of the country that took him to 77 towns from the Alps to the tip of the "boot" and on to Sicily. He rounded it off with a rally in Rome that attracted several hundred thousand people.

Turnout in the election was about 75% – the lowest since the Italian republic was founded after the second world war. Abstention was encouraged by heavy snow in parts of the north and centre of the country and storms and flooding in the south. But it was rooted in widespread disillusionment over the corruption and stagnation in Italian politics.

Former Berlusconi supporters who had been toying with abstention seem to have been persuaded to vote in force by the media tycoon's promise to abolish an unpopular property tax on primary residences and refund the €4bn (£3.4bn) levied in 2012.

The tax was imposed as part of a drive by Monti's technocratic government to put Italy's public finances in order after a collapse at the end of 2011 in investor confidence.

Now that risk is fast taking shape again. Berlusconi is deeply mistrusted in the markets and Grillo wants a referendum on whether Italy should quit the euro. Mired in recession, Italy has had a decade of economic near-stagnation followed by a year of punishing austerity that has made the pledges of both men – though lambasted by their opponents as unfeasible – highly attractive.

The Italian election

It looks very much like political stalemate in the Italian elections, which will not bode well for the country's economy. Plus, we have the scandals in the Vatican and an eruption of Mt Etna.

We will have to keep a close eye on Italy

Italy election neck-and-neck between Berlusconi's right and Bersani's left

Earliest projections show Silvio Berlusconi's centre-right coalition just ahead in Senate, contradicting exit polls.

The Guardian,

25 February, 2013

The Italian general election has turned into a neck-and-neck race between right and left after the earliest projections contradicted exit polls showing the centre-left heading for victory.

The first estimates based on the actual count showed Silvio Berlusconi's centre-right alliance ahead of Pier Luigi Bersani's centre-left by 31% to 29.5% in the upper house or Senate. The unexpected turnaround sent the interest rate on Italy's debt soaring as traders took fright at the prospect of a divided parliament with different majorities in the upper and lower houses.

One of the projections made Beppe Grillo's Five Star Movement (M5S) Italy's leading party. However, because it is running alone and not in a coalition, it lagged the two big alliances.

Earlier, exit polls had indicated that the centre-left, led by Bersani's Democratic party (PD), was comfortably ahead by around six percentage points. They also showed an apparent slump in support for the centrist bloc of Mario Monti, the outgoing technocratic premier, that was borne out in the subsequent projections.

An exit poll for Rai, the state broadcaster, had put the centre-left bloc of the PD and its allies on 35-37% of the vote in the lower house of parliament and 36-38% in the Senate.

The centre-right bloc led by Berlusconi's Freedom People party was in second position, with 29-31% and 30-32% in the Senate. The same poll put the M5S in third, and Monti's centrist grouping significantly behind in fourth. The results were roughly echoed by a separate exit poll for Sky television.

Observers cautioned against setting too much store by the exit polls, which have proved unreliable in the past.

The fate of the Senate is less clear. The result will rest on key regions such as Lombardy, where the centre-right – in alliance with the Northern League – could win and deprive the centre-left of seats it would need for a majority. Sky's exit poll said the Lombardy result was tied.

Another crucial factor will be whether Monti's centrist bloc manages to gain enough Senate seats to be of use to the PD as a potential governing ally.

Turnout, according to exit polls, was significantly down on the last election in 2008. The parliamentary elections will mark the end of Monti's technocratic government, brought in at the end of 2011.

The fractured nature of the political landscape and complexities of the electoral system have raised fears that recession-mired Italy, which has had a decade of near-economic stagnation and more than a year of punishing austerity, could end up with a deadlock in which no strong government is possible

From Hung Parliament To BTP Sell Off: JPM Says To Expect A 40-100 Bps Rise In Italian Bond Yields

Zero Hedge,

25 February, 2013

Today's stunning comeback by Berlusconi, which is really a slide in support for Bersani and Monti whose joint coalition government is unlikely to have the 158 seats needed in the Senate to avoid elections in a few months, means the "Plan B" aka "worst" outcome is in play. How "worst"? In a note released over the weekend, JPM strategist Gianluca Salford attributed a tiny 15-20% probability to an outcome that now appears to be the base case. A far more likely result (defined by JPM as 75%) would have been a continuation of the status quo, which saw an easily-formed Center Left government. As of this moment, that no longer appears feasible. So as the next steps play out, the fulcrum security will be Italian BTPs, which according to JPM will be whacked to the tune of 40 to 100 bps (at least to start), and with deleveraging feedback loops picking up after, who knows where this will end, especially in a worst-er case scenario where there will be months of political and social uncertainty in Italy.

From JPM:

In our baseline scenario (75% probability), a centre-left plus centre government with a solid majority in both houses is likely to push 10Y BTPs to the 4.00% area (Exhibit 1), in the following days. In the baseline scenario, the most important variables to watch are the strength of the combined majority and the balance of power between centre-left and centre. We believe that the strength of the majority will be a market positive, whereas, based on our estimates, Monti’s limited political appeal is unlikely to boost market sentiment.

In the case of an outright centre-left majority in both Houses with the explicit refusal to enlarge the coalition to Monti’s centre (5% probability), we expect little change compared to current levels. The failure by the centre-left (even with the support of the centre) to reach a majority of seats in the Senate (5% probability) would force tortuous negotiations to extend the majority to other parties and would not be welcome by financial markets, pushing yields, at least initially, up around 40bp.

The most negative outcome (15% probability) would be a centre-right victory in the Chamber due to the political uncertainty related to the need to forge a majority in the Senate. We expect discussions between the centre-right and centre to be complex and, in addition, we see a high risk that the coalition would have to be extended to the centre-left. The initial reaction might be in the order of up to 100bp, although we expect pressure from the President of the Republic and from financial markets to eventually lead to the creation of another Grand Coalition. We expect 10Y Bunds to move with a beta of roughly -0.25 to changes in BTP yields. Weighting the scenario, the direction is for a modest decline in BTP yields and a touch higher Bund yields, but we reiterate that we do not see much value in prepositioning.

In retrospect, perhaps one should have "prepositioned."

Berlsuconi

Berlusconi defends bribery

 Financial Times,

15 February, 2013

Former prime minister Silvio Berlusconi has defended the need for bribery in winning contracts for Italy’s multinationals, as politicians campaigning in general elections have been forced to respond to a welter of corruption scandals revolving around the nexus of politics and business.

“Bribes are a phenomenon that exists and it’s useless to deny the existence of these necessary situations when you are negotiating with third world countries and regimes,” Mr Berlusconi, leader of a centre-right coalition and seeking his fourth stint in office, said on Thursday.

Monti resigns

Italian PM Mario Monti resigns

Italian Prime Minister Mario Montihas resigned fter 13 months in office, as promised.

Former prime minister Silvio Berlusconi has already announced that he'll try to replace Monti in February's election.

Al Jazeera's Claudio Lavanga reports from Rome.

Berlusconi reappears on the scene

Berlusconi: "Italy May Be Forced To Leave The Eurozone And Return To The Lira"

Zero Hedge,

18 December, 2012

Reminding the world of just the kind of truthiness that got him sacked originally by that other Italian, the Ex-Goldmanite Mario Draghi, back in November 2011, and which the world has to look forward to when Silvio Berlusconi returns to power some time in 2013, even if not as PM (a position he currently has a snowball's chance in hell of regaining based on current political polls), Reuters informs us that the Italian, who certainly has not read the Goldman book on status quo perpetuation, just said the unimaginable: the truth. To wit: "If Germany doesn't accept that the ECB must be a real central bank, if interest rates don't come down, we will be forced to leave the euro and return to our own currency in order to be competitive." Berlusconi said in comments reported by Italian news agencies Ansa and Agi. The 76-year-old media tycoon has made similar remarks in the past about the possibility of Italy, or even Germany, leaving the euro, but has often at least partially rectified them later." Not this time. Now with Germany and the Buba folding like a broken chair, Silvio is coming back and knows he can demand anything and everything, and Germany has no choice but to accept, Merkel reelection in a few months be damned.

Perhaps the former PM who recently got engaged to this 28 year old girl who obviously loves him for his personality has read our little primer on what happens in a Europe in which external devaluation (i.e., FX) is not a possibility, and where another 30-50% drop in PIIGS salaries would be neccesary to restore competitiveness. That, or a return to the Lira of course. And Berlusconi has seen that in the duel between Greece and Germany so far the former (and specifically its creditors) have gotten all the advantage. It is only a matter of time before he parlays that negotiating approach to Italy as well, and in the process destabilizes whatever artificial balance the ECB may have created.

More from Reuters:

Former prime minister Silvio Berlusconi said on Tuesday Italy would be forced to leave the euro zone unless the European Central Bank gets more powers to ensure lower borrowing costs.

 

Berlusconi, who announced this month he will again lead his People of Freedom party (PDL) in a national election expected in February, said on a talk-show on state broadcaster RAI that the ECB should become a lender of last resort for the currency bloc.

 

Berlusconi is already campaigning hard for the election with a spate of television interviews in an attempt to close the wide gap with the center-left Democratic Party which is polling at above 30 percent, some 14 points above the PDL.

 

Berlusconi was forced to resign as prime minister in November last year as Italian bond yields surged at the height of the euro zone debt crisis.

Enjoy the little European respite ladies and gents, because in a few weeks, the Magic Money Tree-free reality is coming back with a vengeance.

Silvio Berlusconi

He is very unlikely to ever see the inside of a jail cell.

Silvio Berlusconi sentenced to four years in jail for tax fraud

Italian former prime minister, who also faces accusations of sex with underage prostitute, can appeal twice more against ruling

the Guardian,

26 October, 2012

Silvio Berlusconi was sentenced to four years' jail by an Italian court on Fridayat the end of a lengthy trial for tax fraud related to the acquisition of TV rights by his company Mediaset – but it remains unlikely he will ever see a prison cell.

Under the Italian legal system, the country's former prime minister will be entitled to two appeals before a definitive sentence. Berlusconi's sentence will also be reduced to one year under a 2006 measure that stripped three years off sentences for crimes committed before that date.

Berlusconi was also banned from public office for five years and ordered to pay €10m (£8.3m) to the Italian tax office, measures that would take effect if his conviction is upheld by the two appeals.

Frank Agrama, the US-based manager who is accused of selling TV rights to Mediaset at inflated prices, was sentenced to three years, while chairman Fedele Confalonieri, who was also on trial, was acquitted. Two other employees of Berlusconi's firms were also found guilty.

Prosecutors alleged some of the funds paid were then siphoned back to companies controlled by Berlusconi to avoid taxes. In his ruling, judge Edoardo D'Avossa, wrote that Berlusconi possessed a "natural capacity to commit crime, as shown by his pursuit of the criminal plan."

"This is a political, intolerable sentence," said Berlusconi, who has long accused Italian magistrates of waging war against him through the courts. "We cannot go on like this."

The six-year trial suffered frequent delays as Berlusconi sought to introduce measures while prime minister that would grant him immunity from prosecution.

Berlusconi's indictment in a parallel case known as Mediatrade – which deals with similar offences committed at a different time – was previously dropped.

The sentence comes days after Berlusconi, 76, formally announced he would not seek re-election as prime minister in elections due next year. Berlusconi resigned from office in November 2011 – his third spell as prime minister — weakened by scandals and the economic crisis engulfing Italy.

Berlusconi has beaten three previous convictions for financial crimes, twice on appeal and once thanks to the statute of limitations. In total Berlusconi has faced 33 trials. Last year, his trial for allegedly bribing British lawyer David Mills was timed out by the statute of limitations before it reached a verdict.

"There is about a year to go before the statute of limitations takes effect in the Mediaset case, so they may get to a conclusive verdict," said Marco Travaglio, an Italian journalist critical of Berlusconi. "The fine and the ban on public office will only take effect after the final appeal, but if he is given a conclusive conviction, he will have to leave parliament," he added. "In Italy, you go to jail only if you receive three years, so if the sentence is cut to one, Berlusconi will not go to jail."

Berlusconi's lawyer Niccolò Ghedini described the sentence as "absolutely incredibile".

Berlusconi is also on trial in Milan accused of paying an underage prostitute. The case revolves around Karima El-Mahroug, also known as Ruby Heartstealer, who attended parties at Berlusconi's Milan mansion in 2010 aged 17.

The trial is expected to end by the end of this year. Mahroug said in a TV interview this week that she did not have sex with Berlusconi. Asked if Berlusconi had asked to have sex with her, she replied: "In an explicit manner, no."

She confirmed that female guests at Berlusconi's parties danced in a risqué fashion. Three associates of Berlusconi are on trial separately for procuring prostitutes for the former prime minister.

Change of guard in italy

Mr. Monti is like his Greek counterpart, Mr Papademos, a technocrat who is well-equipped to  
remove democracy and national sovereignty in Italy.  No doubt he will serve the interests of the Bilderberg Group and the banksters well.

Mario Monti replaces Berlusconi as Italian PM

Economist and former European commissioner appointed to pick members of emergency government after Berlusconi resigns.

Al Jazeera,
13 November, 2011

Italy's head of state has appointed economist and former European Commissioner Mario Monti to succeed outgoing Prime Minister Silvio Berlusconi and handle a crisis that has brought the eurozone's third largest economy to the brink of financial disaster.

Giorgio Napolitano, the Italian president, made the appointment on Sunday after talks with leaders of the two houses of parliament.

Monti must now draw up a caretaker cabinet and government of technocrats, lay out his priorities and determine whether he has enough support in parliament to govern effectively.

The announcement on Sunday followed celebrations in the streets of Rome over the departure of Berlusconi, who faced a chorus of jeers and insults as he was driven to the Quirinale Palace to hand his resignation to Napolitano on Saturday.

In a video message televised on Sunday, Berlusconi said he was pleased that the government had passed a budget vote in record time with more than 50 per cent of the reforms that were asked by the eurozone, in a demonstration that Italy will and can fulfil the measures as needed by its European partners.

He said that was a sign that he had honoured the confidence electors had given his party in 2008.

"Following the approval of the law, I have tendered my resignation as president of the council of ministers. I have done it so Italy could avoid being attacked by financial speculation," he said.

Berlusconi:

"...So it has been very sad to see my responsible, generous gesture being welcomed with booing and insults.

"But for the hundreds of demonstrators on the street, they should know we have done all we could to preserve our families from the global crisis that has hit Europe."

Pietro Paganini, a political commentator, told Al Jazeera that Berlusconi had "certainly not left behind an attractive legacy".

"Hopefully a new government will first give Italy credibility, which is what the markets demand."

For article GO HERE

Pressure on the ECB grows as Mario Monti rides to rescue

The European Central Bank (ECB) is under intense pressure to step up purchases of Italian bonds after premier Silvio Berlusconi finally relinquished power in Rome, clearing the way for former EU commissioner Mario Monti to form an emergency government of technocrats.

By Ambrose Evans-Pritchard, International Business Editor

9:14PM GMT 13 Nov 2011

the Telegraph,

13 November, 2011

The "halo effect" of Mr Monti helped bring Italian bond yields back from the brink of a catastrophic spiral on Friday but the gains are likely to be tested again as the new team faces the stark reality of Italy's fractured politics.

"The ECB must make it clear that it will not allow Italy's bond yields to rise above 5pc, however much it costs," said Thomas Mayer, chief economist at Deutsche Bank.

He described the current policy of half-hearted bond purchases as "a recipe for failure", signalling to markets that the ECB is not willing to see the job through with overwhelming force.

Britain's Business Secretary, Vince Cable, echoed the calls for bolder action, blaming the ECB's passive stand for the dramatic escalation of the crisis last week that pushed Italy's €1.8 trillion to brink of meltdown and spread contagion to France.

"The central bank has to have unlimited powers to intervene to support economies, and indeed banks, to prevent collapse," he told the BBC.

"It's very clear that in addition to the disciplines that the southern Europeans are going to have to adopt, the Germans are going to have to play their role in supporting the eurozone. That's either directly or through the central bank, making absolutely sure that the big countries that are subject to speculative attack are properly supported with adequate liquidity."

The EU's €440bn rescue fund (EFSF) is supposed to take the baton from the ECB so it can step back, but the fund is not yet ready and is itself struggling to raise money at a viable cost.

The replacement of Mr Berlusconi with a credible leader committed to the deep reforms demanded by the EU makes it much easier for the ECB to justify help for Italy, but it is far from clear that the bank is willing to give Mr Monti a "dowry" of lower borrowing costs to lighten his task.

Jens Weidmann, head of Germany's Bundesbank and a pivotal ECB governor, has further dug in his heels against any extension of bond purchases.

"We have a mandate and we have to stick to our mandate. Fixing an interest rate for a country is certainly not compatible with our mandate," he said over the weekend.

"The eurosystem must not be a lender of last resort for sovereigns because this would violate Article 123 of the EU treaty. I cannot see how you can ensure the stability of a monetary union by violating its legal provisions."

Investors are betting on a torrid relief rally across global asset markets this week on hopes that new leaders in Italy and Greece will at least break weeks of deadlock, but it is already clear that politics will remain messy.

Mr Berlusconi warned that his People of Liberty Party intends to exercise a de facto veto in Italy's Senate, maintaining its grip on power behind the scenes.

"We are ready to pull the plug," Mr Berlusconi allegedly told supporters. He aims to block any form a wealth tax or bank account levy.

Mr Monti faces a difficult task, forced to work with shifting alliances and bitterly opposed parties on one issue at a time.

"We won't give you a blank cheque," said Umberto Bossi from the Northern League.