Ask the people or go Greek? This is the Italian question

He’s been written off dozens of times but the chances of Berlusconi surviving beyond a parliamentary vote this afternoon (Tuesday) look pretty slim.

Italian businesses, who had hoped the billionaire media magnate would unleash market forces, have disserted him because he has presided over a stagnant economy and has focused soley on serving his own business interests.  

The Church has finally rejected him after loose morals ballooned into sex scandals played out in Italy’s court rooms.

Fellow right wing leaders Nicolas Sarkozy of France and Angela Merkel of Germany – merely dismissive of the baffoonary of the billionaire media magnate in the past – have also turned their back on him, blaming him at the Cannes European summit last week for risking the entire Eurozone project.

Coalition ally, the xenophobic Northern League reportedly sought to persuade him to step aside on Monday. Today its leader Umberto Bossi renewed the call.

Senior figures from his own People of Liberty party are now doing the same.

And above all, he’s been abandoned by the markets, which believe the country is such a risky bet that they have raised the cost of financing Government debt to record levels, placing Italy and its currently unsustainable debt levels, at the centre of the Eurozone crisis.

The confirmation where international capitalism stood on Berlusconi came yesterday when the markets soared on rumours that he was going to stand down.

The reason Berlusconi has held on for so long is the same reason that saw him enter in politics in 1994. At that time his backers in power, notably Socialist leader Bettino Craxi, who had allowed him build up his empire through (mostly) foul means and fair, melted away amid the Bribesville corruption scandals.

Since then Berlusconi has represented himself directly, passing more than 100 pieces of “ad personam” legislation. Only in July, he tried but failed to sneak in draft regulation that would have averted a €750 million penalty on his Fininvest financial holding company, which was ordered to pay to rival Italian corporation CIR in a dispute over the takeover of publisher Arnoldo Mondadori Editore in the 1990s. 

In recent weeks and days, he will have been working flat out to find a solution that keeps friends in power so he could try and fix his flagging business empire and keep out of jail  – he’s a defendant in three trials for bribery, tax fraud, abuse of power and paying for sex with a 17-year-old girl.

At 75 he’s unlikely to see prison. But he wants to ensure his offspring maintain his business empire and their billionaire lifestyles. Yesterday he met with family members who are placed in key positions in his business empire and senior executives from Fininvest.

Handing over the reins of government to a party loyalist –“ perhaps Gianni Letta, a junior minister and former employee – had been circulating as a possible compromise.The latest idea is for Angelino Alfano to take over as premier, a lawyer with no expertise in economics whose job, as Justice Minister, was basically to pass laws to prevent the prosecution of Berlusconi. 

The truth is neither is a likely solution.

Massive pressure is on to step aside to allow the formation of a “government of national unity.” This would see a so-called ‘technocrat’ like former European Competition Commissioner Mario Monti appointed prime minister, backed by most of the other parties, from many within Berlusconi’s own political movement to the main opposition Democrats passing by a number of smaller parties consisting of former christian democrats, fascists and right-wing liberals.

Assuming this coalition could hold together this would be preferred solution of local corporations, foreign bond-holders, the banks and the representatives of financial capital at the European Central Bank, IMF, European Commission and the governments of Germany and France. Italy has form on this front – in the 1990s harsh austerity measures and mass privatisations were implemented by ‘technocrats’ in order to prepare for entry into the Euro.

The alternative to what he Italians call a Government of ‘larghe intese’ is snap elections.

The Northern League leader Umberto Bossi backs this solution to the political crisis, presumably hoping it can mobilise its formidable network of activists and supporters around its usual rabid policies of hate to ride a tide of right wing populism back into power.

On the other end of the political spectrum, the country’s two communist parties – for the first time since 1945 unrepresented in parliament – also want immediate elections.

The Communists want to put to the electorate their “alternative to cuts to pensions, welfare, public sector jobs, wages, labour rights, and to privatisation” that was written into a letter sent by the European Central Bank in the summer to Berlusconi but that has yet to be implemented.

And there certainly are alternatives: clawing back the hundreds of billions of euros in tax evasion and avoidance by businesses, especially the big corporations; implementing a tax on assets; above all changing the economic policies intricately linked to the fundamental architecture of the Euro single currency that by making Italian industry uncompetitive, compressing wages and constraining public investment have turned Italy into zombie economy with dire public finances and an increasingly impoverished population.

But beyond what policies are the right ones to take Italy out of its current mess, immediate elections are the right answer to the political crisis because they are the democratic answer.

A recent poll showed 23% of Italians saw no difference between an authoritarian regime and a democracy.

No doubt Berlusconi, with his cast iron control over Italy’s state and private TV, incessant attacks on the independence of the judiciary and constitution has contributed to this view.

But so have the other main actors in the body politic, notably the opposition Democrats, for failing to offer real alternatives that respond to people’s needs and instead reaching for some short term self-serving deal with political rivals.  

The crushing austerity policies and rush to flog off the nation’s family silver now being offered up as the only solution to Italy’s woes were not in any Italian political party’s manifesto when they went to the polls in 2008.

Italians should have the right to decide if, to coin a phrase with much currency lately, i soliti noti, the same old people, pay for the disasters of a small privileged minority.

Whether Italians do get that chance to decide for themselves, or are silenced, Greek-style is the big question.