Europe

In Italy's Disarray, Berlusconi Emerges Anew as a Power


Former Prime Minister Berlusconi at a political rally in Milan

Photograph by Pier Marco Tacca/Getty Images

Former Prime Minister Berlusconi at a political rally in Milan

In any other country, Silvio Berlusconi would have been a mortally wounded candidate. He is appealing a conviction for tax fraud, facing trial on charges of prostitution with a minor, and the last time he was in office in 2011, he stepped down amid fear that his clumsy handling of the economy would cause the country to collapse.

But in Italy, it turns out, none of those factors are fatal. After a two-month campaign in which the 76-year-old media mogul sometimes appeared with his 27-year-old fiancee, Berlusconi raked in enough votes to nearly put him in charge of the country once again. For more than 10 hours of vote counting Monday, the former prime minister was neck-and-neck with his closest rival. The balloting ultimately left him with 29.2 percent of the vote in the lower house of parliament—just 0.4 percent behind the center-left candidate, Pier Luigi Bersani—and with enough support in the Senate to deny his opponent the majority he would need to easily form a government.

To be sure, Berlusconi was helped by the center-left’s lackluster campaign, in which Bersani and his allies shied from spooking the markets while embracing the unpopular reforms proposed by Prime Minister Mario Monti, without spelling out clear proposals of their own. Monti, for his part, seemed to be running away from his own policies—in particular an unpopular housing tax that Berlusconi had promised not only to repeal, but to refund in cash. Monti received 10.6 percent of the vote. Both allowed Berlusconi, a master of seizing the spotlight, to define the terms of the debate. “Political studies show that the people who vote for Berlusconi don’t trust him,” says Giovanni Orsina, the author of The Republic after Berlusconi. “But who did the Berlusconi voter have to vote for? Nobody even asked for his vote.”

By far the country’s most masterful politician, Berlusconi has mined a deep vein of Italian identity politics. For nearly 50 years after the cold war, the country was dominated by a single party, the Christian Democrats and its allies, dedicated to a single purpose: keeping the Italian Communist Party out of power. The Christian Democrats collapsed in the early 1990s, swept out by corruption scandals that overturned the entire political spectrum. The Communist Party dissolved as well, yielding to a moderate, left-wing party called Democrats of the Left.

So traumatic was the change that Italians refer to the periods before and after the political implosion as the First and Second Republics, as if the country made a clean break with its past. In reality, the underlying electoral blocks have remained the same. In 1994, Berlusconi swept into his first term as prime minister on a campaign largely centered on preventing the former Communists from taking power. “Even though communism was gone, the line of fracture remained the same,” says Ilvo Diamanti, a political scientist at the University of Urbino. “It had just been replaced by for and against Berlusconi.”

A big question following the Italian election is whether the emergence of a new force, in the form of the Five Star Movement led by a frizzy haired comedian named Beppe Grillo, has the potential to redraw the country’s political map. At heart a protest party—Grillo first entered politics by organizing nationwide protests he called “Go F— yourself days”—the movement won 25.6 percent of the vote, making it the largest party in Italy’s Parliament. (Bersani and Berlusconi each draw part of their support from coalition partners.) Campaigning on an anti-austerity, anti-establishment platform, the Five Star Movement sucked votes from left and right.

On Tuesday, emerging more than 24 hours after polls had closed, Bersani seemed to leave open the possibility for cooperation with Grillo’s parliamentarians, who have pledged not to form alliances with Italy’s established parties. Berlusconi also hinted that he would consider an alliance with Bersani. Monti seems to have been completely forgotten.

Meanwhile, the domino that once threatened to bring down the entire euro zone is far from steady. On Monday, the labor ministry announced that Italy lost 640,000 jobs in the first nine months of 2012, an average of more than 2,000 jobs a day. Even after a year of sacrifices, Italy’s debt-to-gross domestic product ratio has continued to rise, from 121 percent in 2011 to 127 percent today, as Monti’s austerity measures were undermined by a still-sinking economy. On the day after the vote, the stock market plunged 4.9 percent. “This country is slowly dying, and we’re standing around the cadaver arguing about who will be the doctor who will try to cure it,” says Giuseppe Ragusa, an economist at Rome’s Luiss University. Berlusconi may be a survivor. The question is: What will happen to his country?

Faris is a Bloomberg Businessweek contributor.

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