Tuesday, November 08, 2011

With Less Than 1/4 Of Italians Polled Supporting Him PM Berlusconi May Be Toast Later Today

Posted by Peter Quennell


Breaking news. Stocks jump in Europe and the US on the news that PM Berlusconi has told the President of the Italian republic he will soon resign.

PM Berlusconi let it be known several weeks ago that he had agreed with his coalition partners to be gone by this Christmas.

Global stockmarkets liked that as there has for a while existed a premium built in to his going. But several days ago he was reported as having done a U-turn, and was now intent on hanging on.

Not least so he can keep one step ahead of Milan prosecutors who have lined up three cases against him. And Perugia (yes Perugia) prosecutors investigating his close buddies for milking contracts for the 2006 winter Olympics and 2010 earthquake rebuild. 

Today there will be a routine budget vote in the Italian parliament - but Mr Berlusconi has attached to it a vote of confidence in himself. This is from the investors’ website The Street.

Italian politics remains in the spotlight. The Italian bond market’s off-the-run 10-year yields are currently at 6.591%. The Italian government will submit a routine budget for Parliament to vote today, with Berlusconi attaching a confidence vote to a failed budgetary outcome. From there, if the government fails to reach a majority of 316 votes for a confidence vote, Berlusconi will be forced to resign his post.

Ahead of the vote, speculation about the prime minister’s imminent departure is rife and markets have welcomed the prospect. In Italy’s fragmented political landscape, his departure would not necessarily mean that austerity measures will pass quicker.

If the Berlusconi government falls, the first choice would likely be to see if a new coalition government can be formed with the existing parliament. This is likely to be supportive of risk appetite in the short term, but it would end quickly if a coalition could not be formed and the fall in the government were to lead to elections. This would ultimately delay the passage of the austerity measures and sap business and investor confidence even further.

Nevertheless, from here the best outcome for market sentiment in is likely to be a resignation of Berlusconi followed by the formation of a new government from the existing parliament.

And this “et tu Brute” report was just posted online by the National Post.

Silvio Berlusconi’s closest coalition ally Umberto Bossi told him to resign on Tuesday in what could be a mortal blow to the Italian prime minister.

Bossi, head of the devolutionist Northern League, said the 75-year-old media magnate should be replaced by Angelino Alfano [image below] secretary of the premier’s PDL party.

“We asked the prime minister to stand down,” Bossi told reporters outside parliament.

Odds are Mr Berlusconi will be gone today later today or very soon and there will be national elections within six months. Hopefully the incessant political meddling with the Italian justice system, which we suspect affected the Perugia appeal verdict, will then cease.

US Secretary of State Hillary Clinton is said to have favored Berlusconi’s short-term survival, but these days irritated markets speak louder than politicians’ words.

[Below right: Mr Angelino Alfano, Mr Berlusconi’s most likely immediate successor]


Posted by Peter Quennell on 11/08/11 at 10:04 AM in The wider contextsItalian context


Comments

By the way thanks to Al Jazeerah for another timely video report. Al Jazeerah are really beating out Reuters and AP and UP in broadcasting objective takes and posting them quickly online.

There may be something in their business model telling them that prompt and truthful video news reports online is a value-growing way to go. Nice trend if the other press services care to make it so.

Posted by Peter Quennell on 11/08/11 at 11:09 AM | #

Yes, I started looking at their English site when Bush wanted to bomb their head office. Bush made them famous. At that time only very few items were in English but they appear to be very professional.  I often wondered how a middle east news channel can be so independent and honest in reporting (they do not offend their host- Qatar, which is a really very small country and it is really very easy not to offend them). Reuters and AP always try to be politically correct and aljazerra is a nice counter balance to them!

The way elections were won in Italy is really embarrassing.  There was and is, nobody to really challenge him- I sometimes read Beppe Grillo’s blog and feel sad.

Posted by chami on 11/08/11 at 11:36 AM | #

Hi Chami. Those Gulf Arabs had some of the most successful trading economies in the world several centuries ago.

I do things with Kuwait which was once the biggest trading biggie of them all. Many Kuwaities have told me they regard their huge oil as a millstone that wrecks their chances of growing other businesses that could come out ahead. So no new jobs. One of the richest Kuwaiti princes asked me to come in on a Friday (their day off) so we could talk.

Qatar has the world’s largest per capita production and reserves of oil and natural gas, but Al Jazeerah seems not to even notice the millstone. Good for them.

Posted by Peter Quennell on 11/08/11 at 11:57 AM | #

This was the first report online from Reuters.

“Italian Prime Minister Silvio Berlusconi suffered a huge humiliation in parliament on Tuesday in a vote that indicated he no longer had a majority and ratcheted up pressure for him to resign.  Berlusconi’s government won a key budget vote after the opposition abstained but obtained only 308 votes compared with an absolute majority in the lower house of 316 votes.”

However Associated Press soon after reported it as a sort of win even though it was far short of a true majority. Stocks dropped and bond rates will hit the roof. In absence of the sufficient political backbone the markets will now hold a gun to the PM’s head. 

More updates here would be welcome as I’m having to head offline.

*******

Excellent think piece below, Martin, we can if you like jump that to a front page post.

Posted by Peter Quennell on 11/08/11 at 12:04 PM | #

@martin

A very good analysis of the current state indeed!

I was also anticipating the same, but was not sure it will come so soon and so openly.  It even looks vulgar to me.  A part of her brain, that deals with love, affection, empathy etc. is missing.  I shall be least surprised if her current (as of now) boyfriend comes out next month with an article “I was Amanda’s lover” in the newspapers.  She is not made for a wife, far less a mother.  She can be a “today’s (at most this weeks) girlfriend” at best.  Something is seriously wrong somewhere.  And it is not about money.

One hour back google showed the groundreport article: http://www.groundreport.com/Opinion/Internet-hatred-the-new-pastime-of-the-mob/2942445 and only two comments in the last one hour!  Her base is shrinking obviously.  Of course Nigel Scott has written pages without saying a single thing!  They are quite clueless.

It does not matter whether her conviction is reinstated or not, unless she comes clean to the public, she will remain guilty.  And it is obvious at this moment that she cannot come clean in public. Personally I think she has purchased her freedom.

In fact, RS is in a better shape to come clean.

Posted by chami on 11/08/11 at 03:36 PM | #

Speaking strictly from an American point of view, we don’t want a leftist government in Italy. If the Northern League is on the outs, then they will agitate for secession.  I don’t know if the center-right coalition can re-form behind another figure other than Berlusconi. 

What a mess. 

On the other hand, they say about England: Situation serious, but not hopeless.  They say about Italy: Situation hopeless, but not serious.

Posted by Gonzaga on 11/08/11 at 03:37 PM | #

Chami and Martin, it also occurred to me that she may get pregnant. I think it is a very likely scenario.

Posted by Melanie on 11/08/11 at 05:03 PM | #

@ Martin

Really spot on, but I do not think America will deport her back to Italy even is she is found quilty. As for Sollecito, after that interview he gave, I came away with the feeling he is empty, seems out of touch with reality! Kind of gave me the chills. Or maybe I am reading to much into it!

@ chiami

Elections were won in Italy like they are won elsewhere, voted by the people.  What did you think of the Sollecito interview?

Posted by Miriam on 11/08/11 at 05:52 PM | #

Good points Gonzaga though hopefully in the short term a technocratic government gets Ital back on an even keel. This end-of-day is lifted from the Bloomberg business news site.

http://www.bloomberg.com/news/2011-11-08/u-s-stock-index-futures-advance-as-investors-await-italian-budget-vote.html

“Berlusconi is a bit of a cartoon character with respect to world leaders,” Michael Holland, chairman and founder of New York-based Holland & Co., said in a telephone interview. His firm oversees more than $4 billion. “There’s a handful of adults in Europe who are working very hard. The market has a clear view that Berlusconi is not helpful with what Europe needs moving into the future. He is part of the problem, not the solution.”

President Giorgio Napolitano said Berlusconi has agreed to quit after the parliament approves the country’s austerity plans next week. The government has yet to present the final text of the amendment to the budget law with the austerity measures. Berlusconi’s resignation came after he failed to muster an absolute majority on a routine parliamentary ballot, obtaining only 308 votes in the 630-seat Chamber of Deputies today.

“The reality is Berlusconi is not effective and he needs to go,” Madelynn Matlock, who helps oversee about $14.5 billion at Huntington Asset Advisors in Cincinnati, said in a telephone interview. “It seems to me that any rational prime minister would realize that he shouldn’t be prime minister of Italy anymore.”

Posted by Peter Quennell on 11/08/11 at 09:02 PM | #

President Neapolitano is known to be no great fan of the PM and must be relieved to be showing him the door.

It will be interesting to see if Mr Berlusconi’s lackey MR Rocco Girlanda fades and maybe is not re-elected. And if MP Giulia Bongiorno now heads to Sicily to run for mayor.

Mr Mignini’s colleagues in the Perugia questura who are investigating the two national scandals mentioned above in the post must be sighing a few sighs of relief.

Posted by Peter Quennell on 11/08/11 at 09:21 PM | #


Make a comment

If you are reading this please log in to post a comment.

Smileys



Where next:

Click here to return to The Top Of The Front Page

Or to next entry Why The Analysis Of Evidence, Open Questions, Scenarios, And Bigger Issues Won’t Go Away At All Soon

Or to previous entry Meredith’s Perugia #30: Naples Where Meredith On A School Holiday First Got Deeply Hooked On Italy