Silvio Berlusconi, the conjurer

Sunday, June 19 2011. 40 thousand supporters of the Northern League gathered in the small town of Pontida to demand tax cuts, whilst Italy's public debt is expected to top 120 per cent of GDP by the end of the year. And Silvio Berlusconi needs to find a way to sort both hassles out: pleasing his ally whilst keeping the commitments taken with the European Union

Northern League's supporters in Pontida

The Northern League (NL) became a crucial ally of Silvio Berlusconi's PdL (People of Freedom party), since former heir apparent Gianfranco Fini left – slamming the door – to form a new party, called Futuro e Libertà per l'Italia (Future and Freedom for Italy).

Bossi, member of the Senate of Italy

But the recent political defeats both in local elections and in national referendum showed Berlusconi's power waning and – consequently – Northern League enthusiasm and loyalty flagging. A poll indicates that 55% of the league's voters disapproved the performance of the Berlusconi's government.

As the greenish NL supporters crowds gathered in Pontida (it's an annual tradition), singing the praises of the secession (a recurring topic of Northern League popularism), Umberto Bossi – who's still the Commander in Chief of the Northern Italy's party – promised that he will extort at least three things from Berlusconi: substantial tax cuts (as a condition of continued support for the government), the move of three Ministries to Northern Italy (even though Gianni Alemanno, PDL's mayor of Rome, warned of a “hard, serious” tussle to defend the capital's privileges) and the end of the support to the anti-Gaddafi war in Libya.

Tremonti and Berlusconi

“Dear Berlusconi,” Bossi barked into the microphone, “your leadership is at risk in the next elections if you don't make some changes.”. But he seemed to be particularly displeased with Giulio Tremonti, the Minister of Economy and Finance, who has done “shameful things”, according to senator Bossi. A scandal. The thing is that Tremonti insists on fiscal rigour, saying he doesn't want to end up like the Greeks did, and he is soon expected to present a three-year austerity plan, which needs to find additional savings of some €40bn (£35.7bn) to reach the goal of balancing the government’s budget by 2014.

Possibly another “shameful thing”, in the eyes of the Northern League's boss, but there remains the danger of Mr Tremonti resigning if his hand is forced, a loss that would be likely to alarm markets.

Rome's mayor Alemanno (left)

In a nutshell: Berlusconi has to give the Northern League a bone, but that would mean to increase Italian deficit and debt (which is the second biggest in Europe, after Greece's troublesome one) and/or quarrel with Rome's mayor Alemanno and/or renounce to Giulio Tremonti's services and/or...

In the past Berlusconi managed to get out of any kind of situation, but this time it seems only a conjurer can sort this mess out.

Silvio Berlusconi, the European Central Bank and Thomas More

Tuesday, June 16 2011. Silvio Berlusconi's game to assure Mario Draghi post as governor of the ECB is not is not progressing as the Italian prime minister planned.

Sarkozy and Berlusconi

The rules of the game are easy. Mario Draghi – former governor of Banca d'Italia – goes to Frankfurt, and takes his place as governor of the European Central Bank, replacing the Frenchman Jean-Claude Trichet. Berlusconi managed to get Sarkozy's endorsement (even though he'd prefer a Frenchman in that post), but – in exchange – the Italian prime minister has to make sure that there be no more than one Italian in the board and France should maintain one, replacing Jean-Claude Trichet.

That means that incumbent European Central Bank Executive Board member Lorenzo Bini Smaghi must go. Berlusconi had a 10-minute chat with Bini Smaghi, at Palazzo Chigi, the government’s headquarters in Rome, explaining him these very simple directions.

But Italian Silvio's mojo – as most of us already know – is not at his best, and Bini Smaghi has decided to dig in his heels. After the (one-way) discussion with the Italian prime minister, the board member went to the Vatican and “spoke of Thomas More” who “followed his conscience, even at the cost of displeasing the sovereign”. Saint Thomas More is the patron saint of central bankers.

Battling with Thomas More will be a tough task for the declining Silvio.

Silvio Berlusconi and his allies got "slapped in the face", again

Tuesday, June 13 2011. Italian Northern League's Roberto Calderoli states he's fed up with getting slapped in the face, as Silvio Berlusconi suffers the umpteenth defeat in a referendum.

Left-wingers celebrate victory in referendum

It's not a favourable period for Silvio Berlusconi. And it's not a favourable period for his allies. After the crushing local election defeat at the end of May – when both PdL (The People of Freedom) and Northern League reckoned a huge loss in votes – in last weekend Italians mass participation represented another overwhelming setback for the prime minister.

Calderoli (right) with Northern League's leader Umberto Bossi

Even though Berlusconi has downplayed the significance of the vote, Roberto Calderoli, member of the Senate of Italy and Minister for Legislative Simplification, is the one to speak out for his party: they are tired of being involved in Silvio's defeats.

In 2009 Silvio Berlusconi picked as one of his favourite pieces the resumption of nuclear power programme. Unluckily for him, just three months before the referendum, a huge earthquake – and an even more devastating tsunami – stroke Japan, creating one of the most serious incidents in the history of nuclear power in Fukushima. The final outcome of the incident still needs to be fully evaluated.

It's been relatively easy for the anti-nuclear movement – particularly strong in Italy – to reach (and exceed) the legal number of 50% of the voters plus one (indications shows that around 57% of the electorate took part in the referendum). Greenpeace called it a historic result, it comes few weeks after German chancellor Angela Merkel declared that Germany will cast nuclear power plants by 2022.

Actually Berlusconi tried anything in order to undermine the referendum results. Amongst his moves, he temporarily shelved his initiative for new power plants, then appealed against the referendum, saying that it was no longer needed (and hoping to avoid the defeat in the other three questions). But he did not succeed. Few days before the referendum – on June 7 – the Constitutional Court unanimously voted to let the referendum go ahead.

Bossi and Berlusconi: a friendship coming to an end?

And – as the prime minister knew already – it tuned out top become a major defeat for the forces of the Italian cabinet. The overwhelming majority (almost 95% of the voters) voted in favour of the four questions, related to the nuclear power, to the privatisation of water (two questions, voting “yes” meant saying rejecting it), and abrogation of the “legitimate impediment” (which allows the prime minister and cabinet ministers to avoid criminal trial's hearings).

Today the Rubygate trial will resume: other slaps in the offing?

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