Thursday, October 20, 2011

The President Of The Italian Republic Lights A Small Fire Under The Prime Minister

Posted by Peter Quennell

[This post was edited Friday to replace an image with this new video report from Rome]

As they are from separate parties, etcetera, etcetera, they are known to not see eye-to-eye.

We posted here on one role of President Giorgio Napolitano. The ultimate enforcer of the Italian constitution with special reference to the justice system.

On the whole he sides with Cassation and with victims and against political meddling. .

He is also entitled to speak out on Italian politics and the management of the economy. The prime minister seems to be moving on the lines his European partners and global markets would like - but only verrry slowly because of his sea of political and legal troubles.

The president has just drawn attention to this. See this video and report from the BBC.

Italian President Giorgio Napolitano has expressed his frustration at his government’s failure to cope with the country’s worsening debt crisis.

Despite pressure from Italian business and the European Central Bank, Prime Minister Silvio Berlusconi has repeatedly delayed announcing measures to stimulate economic growth.

Speaking ahead of an EU summit, Mr Napolitano said the government had a responsibility to end the delays and take decisive action.

One of a bunch of monkeys has just been lifted off Mr Belusconi’s back. The New York Times reports that a Milan judge has decided not to indict him for tax fraud.

That leaves “only” three pending trials in Milan and his party’s battle with the legal system (which most Italians respect more than any other public institution) is not likely to cool any time soon, even if it is not the most popular or saintly of wars.

Mr Berlusconi takes quite a whack in a polemical new book The Liberty of Servants: Berlusconi’s Italy by the Italian writer Maurizio Viroli . The American monthly Foreign Affairs has an extended excerpt. 

Global stockmarkets are already awarding the pending Italian economic measures a small plus. In the stock chart below (set for one year) the red line is the American index (average), the green line is the German index, and the blue line is the Italian index.

Click for a larger image.  You can see the Italian uptick in the past several weeks. If you want to follow this chart dynamically in future, save this Yahoo Charts link. You can adjust the time period to suit you.

Italian stocks do remain down 60% from this time three years ago. That could change fast if the current measures work. On global stockmarkets Italy often outperforms Germany and Japan.

Posted by Peter Quennell on 10/20/11 at 03:10 PM in The officially involvedThe wider contextsItalian context


The colorful French billionaire Nicolas Berggruen (who owns no home) doesnt sound too crazy about what passes for leadership in Europe these days.


Europe, his childhood home, is caught in a death spiral. For more than a year, European leaders have been shuttling back and forth to emergency summits, cobbling together half-measures that have failed to douse the flames of the euro zone’s sovereign-debt crisis. What Europe needs right now, Berggruen says, is decisive leadership. Instead, its ruling class could barely be called upon to cancel their vacation plans.

“It’s like a bad cartoon,” he says. “All these different leaders . . . They all want to go on vacation, to their holiday houses, and—argh!—they get dragged back to their offices and have to meet in dreadful places like Frankfurt or Brussels. They agree on something, everybody smiles, shakes hands, and they all go back home. One week later, a new crisis.”

The perpetual scramble, Berggruen notes, has become a common affliction across Western democracies, including the United States. Publicly elected policy makers no longer have enough breathing room to make effective policy, because they are hemmed in by the pressures of 24-hour news cycles, gyrating financial markets and increasingly populist electorates. The first step to restore sanity, Berggruen believes, is to revive the proverbial smoke-filled room, a place where “eminent” figures can gather behind closed doors and calmly redesign government.

Posted by Peter Quennell on 10/20/11 at 11:53 PM | #

Also interesting is Nicolas Berggruen on the problem of the super-rich who wont take risks and are into self-preservation. They increasingly have most of the money but wont invest it in anything that could cause really value growth.


Many of these investors have enough wealth to buy millions of dollars of some asset and the time to wait to see what happens. If that investment appreciates wildly, they have increased their fortune; if it goes to zero their standard of living will not change.

But even with the luxury of time and wealth, some of them can find ample reasons not to invest right now.

“Why should I plow money into the market because it has dropped, when it can drop some more?” said Fred Branovan, the president and chief operating officer for FFC Capital Management, which is the family office for Milton Fine, who sold his hotel company to Wyndham Resorts in 1998 for $2.1 billion. “This family is into wealth preservation. They got rich; now they want to stay rich.”

While Mr. Berggruen is confident about the long term, he acknowledged that the next few years could be bleak. “I’m scared like everyone else is because the world is scary,” he said. “I just don’t think the world will disappear.”

Posted by Peter Quennell on 10/21/11 at 12:02 AM | #

So we read today that PM Berlusconi will go very soon.

His deal with the other party in his colaition for an economic retrenchment package includes that he will step down by January.

I suspect one reason he didnt step down earlier is those court cases kept piling up in Milan and as PM he could fire shots across the bows of the justice system.

There must be a big sigh of relief in the prosecutors offices in Perugia.

Posted by Peter Quennell on 10/26/11 at 06:30 PM | #

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