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Wednesday, Dec. 19, 2012

EDITORIAL

Mr. Berlusconi's attempt to return

That didn't take long. Only a year after being forced from office in the wake of economic collapse and prostitution scandals, and after vowing that his days as a national leader were over, former Italian Prime Minister Silvio Berlusconi has said that he will run for office again next year.

His decision comes on the heels of his party's abstention from a vote of confidence for Prime Minister Mario Monti on Nov. 6. Mr. Monti prevailed in that vote, but Italy once again has entered a period of uncertainty, the last thing it needs as it struggles to escape its economic predicament.

There was some confusion. On Nov. 12, Mr. Berlusconi said that if Mr. Monti became a right-of-center candidate for the premiership in the future, he would support him. But, on Nov. 10, Mr. Monti had said that, at the moment, he was not thinking of running in the coming general election.

Mr. Berlusconi has served as prime minister three times, riding a popular wave of discontent into office on each occasion. While the business magnate — he is one of Europe's richest men — has shown an unfailing instinct for reading the public mood and winning elections, in each case, he has failed to turn the country around and fix its structural problems.

Most observers argue that Mr. Berlusconi has focused more on shoring up his personal interests — such as his business empire or by passing legislation that protects him from legal challenges — rather than national interests.

Mr. Berlusconi was forced to resign in November 2011, 18 months short of his full term, as Italy's economy tanked in the aftermath of Greece's woes. Economists speculated — and bond yields reflected the fear — that Italy could default on its debt. A technocratic government headed by Mr. Monti, an economist, replaced the Berlusconi government and instituted a tough program to win back the confidence of markets and other European governments.

Mr. Monti succeeded with a mix of pension reforms and tax hikes that have put Italy's finances on a more sustainable path.

As might be expected, though, austerity is unpopular and politicians are torn between the desire to exploit mounting public unease with the particulars of the reform effort and overall support for its goals.

This is a scenario being replicated throughout all the advanced economies, including Japan.

In addition to the temptation to exploit public unease, Mr. Berlusconi has personal concerns. He was convicted of tax fraud earlier this year and is on trial for alleged sexual misconduct — paying for sex with an under-age prostitute — and abuse of power — trying to cover up those acts — when he was prime minister.

He denies all the charges.

Reportedly Mr. Berlusconi is most troubled by legislation that would ban anyone convicted of certain crimes from political office — legislation that again seems targeted at him, although for different reasons than similar bills in the past.

Claiming that he was "assailed" by requests to return to lead the country as it approaches "the edge of a cliff" far worse than what it faced a year ago, Mr. Berlusconi put an end to mounting speculation and took the leap.

He did so as his party abstained from a vote of confidence for the Monti government — a move designed to distance his party from the government's unpopular measures — but it also ensured that a quorum was present to pass two other measures that enjoy popular support.

Reaction to his announcement was quick. Since Mr. Berlusconi's People of Freedom party (PDL) had supported Mr. Monti, the prospect of its withdrawal from the coalition prompted Standard & Poor's rating agency to say that it might lower Italy's rating, citing uncertainty about the government's determination to stay the course on austerity.

Bond prices rose and the stock market dropped. Mr. Monti himself announced that he would step down as soon as the next budget passes Parliament.

In fact, the changes are small. The current Parliament would expire at the end of April 2013, and elections would follow. Most experts believe that the withdrawal of PDL support would only move the schedule up a few weeks. Elections will not be held until the current government has concluded its business.

Italy's president, Mr. Giorgio Napolitano, wants the Monti government to complete its term and end in an orderly fashion. Since he is the one who has the final say on dissolving the government, that opinion matters.

The dates are unlikely to make much difference for Mr. Berlusconi. His periodic hints that he might again fight for the prime minister's office has divided his party. The Northern League, once a key part of Mr. Berlusconi's power bloc, has been hit by its own scandal and broken with the PDL, although it has not ruled out another coalition.

Most significant, however, is the resurgence of the center-left Democratic Party (PD). It is now led by Mr. Pierluigi Bersani, a shrewd former communist, who has managed to unite a fractious left that now has a comfortable lead over the PDL in opinion polls. His biggest challenge is convincing Italy's conservative voters — who hold a majority — that he will not undo the Monti reforms or pull the country too far to the left.

Perhaps the best result would be a hung Parliament, dominated by neither the left nor the right. In that case, Mr. Monti has said that he would consider staying in office. Since Mr. Napolitano must select a person who gets first chance to build a government, that may not be idle talk.

Continuing the status quo makes sense. Mr. Monti has restored much needed credibility and moved the country forward. Mr. Berlusconi has had three chances to change his country and has little to show for his effort, apart from the protection of his own interests.

As one political leader pointed out, Mr. Berlusconi wants to take Italy back five years. That would be a mistake.



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