giovedì, luglio 08, 2004

The Eyes Have it.

At the risk of turning this into a Berlusconi blog (heaven forfend!) I am just adding to the saga of the growing portfolio of jobs that Berlusconi is trying to take upon himself. You read a couple of days ago that he has appointed himself Minister of Finance, with the 'resignation' of Giulio Tremonti over the weekend. The most likely cause being because of pressure put upon Berlusconi by his compatriots, Fini, Follini and whoever it is that is using the Bossi vote whilst he is in a Swiss clinic, recovering (?) from his recent stroke. The 'boys' took exception to Berlusconi still saying that he was going to initiate tax cuts for the Italian tax-payer, including dropping the highest rate from 45% to 33% - which would be very handy if you just happen to be Italy's richest man, eh? There was also a move against the cutting of economic help to southern Italy, where a lot of the existing political power hangs on the availability of money from the north in order to fund whatever it is that needs funding in the south. Was that suitably imprecise for you? Yes? Good.

Well, the upshot was Marco Follini leaving the coalition government - together with his votes - until Berlusconi toes the line determined by these smaller party members of the coalition. Fini is also there with the threat - but has, so far, not actually abandoned Berlusconi to the winds of change and the forces of power politics.

But, for Berlusconi, things keep going from bad to worse. The latest twist in his tale of political chicanery is that his eldest children, Piersilvio and Marina, repectively Deputy Chairpersons of Mediaset and Fininvest, are now under investigation for money-laundering and handling stolen goods. Oh dear! Not a great turn of events for their father, who is still under investigation himself for embezzlement, false bookkeeping and tax fraud by the same Milanese Investigating Magistrates (a little like a Procurator Fiscal in Scotland).

The inquiry focuses on the purchase by Berlusconi's TV empire, Fininvest and Mediaset, of the screening rights to US films back in 1994 and 1995. Prosecutors believe the deals were channelled offshore to inflate the cost to Mediaset and cut its tax bill. The operation is alleged to have boosted the group's costs by almost £100m.

All that on the back of Standard & Poor's decision to downgrading Italy's credit rating to AA- from AA. It is the first downgrade of a Group of 7 country since S&P reduced Japan's credit rating two years ago, and it means that Italy will have to make increased interest payments to persuade investors to buy, or continue to hold its bonds. Not a good thing for Italy at all.

The reaction from Forza Italia, the political party founded by Berlusconi, was predictable - although classic in its own way. Upon being told of the S&P downgrading of Italy, a spokesperson simply said that S&P were not a trusted source for financial information - "weren't they the people that rated Parmalat very highly?"

Oh well - back to Berlusconi again. He is now backtracking as fast as possible, saying that his self-appointed position as head of the powerful Ministry of Finance and Economy would only now be for a "few days", instead of the open ended "several months" announced originally.

Berlusconi, recalling how he had personally replaced the departed Tremonti at a Brussels session of European Union economic and finance ministers earlier this week, said that the EU ministers had listened to his words as "prime minister and as interim economy minister for a few days". He added nothing more to the statement.

No, it's not been a good week for Berlusconi at all, has it. Perhaps I should leave the last word to Silvio himself, when concluding a speech at the annual State Accountancy Conference, he hurridly left saying "Sorry for having to dash off, but even though someone may not like it I am still the Prime Minister!"