Tuesday, February 15, 2011

Big Silvio in Real Trouble?

The AP story was short and stark, serious like a heart attack:
An Italian judge has ordered Premier Silvio Berlusconi to stand trial on charges he paid for sex with a 17-year-old girl and then tried to cover it up. Judge Cristina Di Censo handed down the indictment Tuesday. The trial is set to begin April 6.
Once again, The Hourly G isn’t interested in tawdry sex stories—but if Berlusconi falls, it could have unanticipated consequences for the euro. 

Why? Because Italy is in the same hole as Spain, Ireland, Portugal and Greece—there is a reason they are collectively known as the PIIGS. 

All of the weak economies in the euro-zone—the PIIGS—are over-indebted: They need further funding from the bond markets, in order to stay operational. If there is a seizure in the euro-bond market—for whatever reason—then all of these countries, no just Italy, could suffer a crash. 

And even if it’s just Italy, that’s still a huge elephant: Italy’s GDP is $2 trillion, compared to $3.3 trillion for Germany. Italy simply cannot be bailed out like Ireland ($204 billion) or Greece ($305 billion). 

Ordinarily, sexual politics wouldn’t influence macro-economic policy—but this is Italy. If the Berlusconi government falls, there will be political chaos in Italy—and therefore no clear direction for the bond markets, which at this point in time rule the European continent. 

So this isn’t a Bill Clinton-style freak-show, put on for our collective amusement, but ultimately inconsequential—this Berlusconi thing matters


  1. Even if I do not like Mr Berlusconi I have to admit that the Milano judges are acting a political and not a legal action. They where investigating and intercepting Mr. Berlusconi Before there was anything against him. Which was illegal. Only after they could came out with this girls story…
    There are rumors that Obama administration is finally behind: they do not like the friendship between Berlusconi and Putin. And they would like to say by by to both of them.
    All this this is a very serious matter about the future of democracy in Italy.

  2. I fully endorse niki AND gonzalo.
    This is MUCH MORE than a sexual scandal.

  3. Actually Gonzalo, Alexander Cockburn at Counterpunch would say that Monica Lewinsky saved Social Security. So don't sell Bill Clinton short!! Ok, maybe it wasn't planned that way. Maybe.


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