In what is the day’s most overhyped piece of non-news, we go to Italy to learn what many already knew on Thursday, namely that with the loss of support of Berlusconi’s PDL party, Mario Monti’s technocratic government, which correctly “feels” it lost its parliamentary support, is coming to an end and after a two hour meeting between the former Goldman advisor and Italian president Napolitano, Monti announced he “intends to resign after checking to see if parliament can pass next year’s budget law, President Giorgio Napolitano’s office said on Saturday… If the budget law can be passed “quickly”, Monti said he would immediately confirm his resignation. Monti’s announcement came after a two-hour meeting with Napolitano, who has the power to dissolve parliament.” The reason this is non-news is that Monti government’s tenure is ending in a few months anyway, and general elections are coming in Q1 regardless. In other words, it may take weeks or months for the budget law to pass, or not, at which point it will be time for new elections anyway.
Continuing with the non-news, is Berlusconi’s latest attempt to remain relevant, by announcing, again, that he intends to run for Prime Minister.
Silvio Berlusconi said on Saturday he will stand to lead Italy for a fifth time, challenging the leftist frontrunner a year after being forced to resign amid a sex scandal and a debt crisis.
The 76-year-old media tycoon, facing possible jail time for tax fraud and a trial for having sex with an underage prostitute, had hinted for months he might make a comeback in an election in about three months’ time. He accuses technocrat Prime Minister Mario Monti of bringing the third-biggest euro zone economy to “the edge of an abyss” with austerity policies.
“I race to win,” Berlusconi told reporters at the practice field for AC Milan, the soccer club he controls, after repeating criticism of Monti’s handling of the economy over the past year.
“To win, everyone said there had to be a tested leader. It’s not that we did not look for one. We did, and how! But there isn’t one… I’m doing it out of a sense of responsibility.”
Considering this news was first floated in July, it is surprising the media is making such a big deal out of this development. The development is made particularly irrelevant considering that the popularity of Berlusconi’s PDL is so low he has no chance of winning the election.
Italy’s center-left Democratic Party has slightly increased its opinion poll lead, according to a survey conducted just before a political crisis threatened to end Prime Minister Mario Monti’s term early.
Elections are expected to be held early next year,
The poll by the SWG institute for RAI television showed the Democratic Party (PD) on 30.3 percent, up from 30 percent a week earlier, ahead of the anti-establishment 5-Star Movement of comic Beppe Grillo on 19.7 percent.
Silvio Berlusconi’s center-right PDL party, which triggered instability on Thursday by withholding its support for Monti’s technocrat government in two parliamentary confidence votes, saw a slight drop to 13.8 percent from 14.3 percent a week earlier.
In other words, any political relevant Berlusconi may have will be not as a PM, but as a balancing force in a new coalition government. He only open question is how much of a political variable Bunga’s return to politics will mean to capital markets and to Italian bond prices which have recovered substantially since hitting near record lows in the days before the ECB did everything in its power to force Berlusconi out in November 2011.
His move may unsettle financial markets, whose loss of faith in Berlusconi’s guidance of the economy pushed the country to the edge of a Greek-style debt crisis last year and prompted President Giorgio Napolitano to ask the former European commissioner Monti to step in to restore confidence.
With the support of a right-left coalition including the PDL, Monti imposed austerity measures to bring borrowing costs under control, but Berlusconi said on Wednesday that the economic professor’s policies had left Italy facing a “recessive spiral without end”.
The PDL withdrew parliamentary support for Monti on Thursday, raising the specter of a snap election and driving up the difference between German and Italian benchmark bonds by about 30 basis points.
One thing appears sure: the eye of the Hurricane, in which various European technocratic governments got a blank check from the population to run programs which continue to be incorrectly classified as “austerity”, is shifting as these same populations demand a return to the old status quo, in which Europe reveled for decades before the arrival of Goldman Sachs as global hegemon.
Which however does beg the question: is Goldman so confident in its foothold of European the monetary mechanism with the “surprising” arrival of Goldmanite Mark Carney to head the Bank of England, in effect handing all of Europe over to statist monetary interests, that the vampire squid is willing to hand over the illusion that political muppets are relevant, back to the people.
Said otherwise: was 2012 the year in which Goldman remarked Europe on a Mark-To-Mario basis?
It remains yet to be seen if this will be a very short-sighted move, now that attention will shift back once more to Italy.