COURTESY: EURONEWS.COM
Berlusconi seemed to be all but gone, rolled over, played dead.
Headlines called him the "mummy" and others, the debauching child usurper. Many thought they'd seen the last of him.
Whichever way you looked at it, the implausibility of the old politician, who takes care to appear youthful in ways that make him look like his personal version of a madame Tussaud's creation, seemed etched in stone.
But now, it seems he might have the last laugh, and for every Italian who abhors him, the last tear.
Yessiree, he has more political lives than the proverbial cat. But why?
The answer is simple, confusion. Or better still chaos. Unbridled, unmanageable chaos.
There are after all nearly 84 parties in Italy. Just that can make a head hurt.
But the stakes are high, very high. Italy is facing a severe economic and financial fallout. People are fearful and confused and look at neighboring Greece as a destiny foretold.
And indeed, there are many similarities with Greece, including massive fiscal evasion. But Italy is a world class economy, at number 7 worldwide. That is a frightful thought. If Italy fails, so could Europe. The US would feel it, very much so.
Enter then a statement made yesterday by a relevant banking institution. The spokesman for Mediobanca, asserted that a victory for the septuagenarian would be a good outcome for Italy, because it would scare the markets, and therefore force Italy to finally ask for the bailout it needs, which would then lower borrowing costs, thereby avoid falling off the cliff.
What? Let's backtrack a moment. Only last year a dapper financier, Mr. Mario Monti was put in place of the disgraced premier to 'save the ship.' He in turn made sure that austerity touched every one of its worried citizens, by taxing everything that was, or was not, nailed to the proverbial wall.
That so far, proved to be ineffective.
But let's examine for a minute this statement of Mediobanca. The spokesman asserts that the election of Berlusconi, which he sees as a result of people's fear and uncertainty, would lead to higher Italian bond yields, which would mean higher borrowing costs, which would be, he asserts, 'the perfect excuse' to apply for a bailout.
Since Mr. Berlusconi's campaign meme has been, "i will reverse all of Monti's policies ( and even give you the money back" that would mean that the austerity measures taken to avoid falling off the cliff would be voided, thereby placing Italy in a precarious situation again.
Now if that sounds iffy, it should. And coming from a publicly traded investment bank? Besides, the bailout is what got Greece its own ruinous austerity, as the bailout came with almost draconian requests for cuts in every sector of the economy.
Has the banking sector thrown in the towel? or is there something more complicated at work?
And why has Italy not asked for a bailout before?
Ah, that's the 20,000$ question. A bailout from the EU bank would imply an 'opening of the books', which could reveal how truly dismal the situation in Italy is.
Why then does the banking sector want Berlusconi to come back? Well we'll leave that to market savvy individuals who can ferret out what interests if any the investment sector has in this ball. For the rest, conspiracy theories will fly and fear will reign.
But then again, it's Italy
Op-ed from a Bloomberg article
Source: Bloomberg 2.18.13
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