Even as yields on Italian sovereign bonds headed towards record levels in October, Mr Berlusconi appeared distracted by domestic legal shenanigans and failed to address the problem of Italy’s finances to the satisfaction of his German and French counterparts. By November, with Greece tottering on the brink again and markets sensing that Italy might be next in line, Mr Berlusconi had come to be seen as an impediment towards resolving Italy’s woes and, by extension, the critical objective of finding a wider solution for the euro zone debt crisis.
Mr Berlusconi, who only this year had survived several attempts by the opposition to unseat him, finally succumbed to a putsch triggered by several former loyalists from his People of Freedom (PDL), an indication that dissatisfaction with him had reached unbearable levels. In a parliamentary vote on the 2010 public finances on 8th November, the government only got 308 votes and not the 316 needed when the entire opposition and key PDL defectors abstained from the vote. With the loss of his majority, Mr Berlusconi subsequently confirmed that he would resign after his government passes an austerity package over the weekend.
Despite this, it is unlikely that the man who dominated Italian politics for a good part of the last two decades will fade quickly from the scene. Mr Berlusconi still retains important levers of political largesse through his considerable fortune and control over large segments of Italian media. The PDL is a personal fief, with many legislators dependent on Mr Berlusconi’s patronage and his personal brand as Italy’s most successful politician in recent memory.
Moreover, Mr Berlusconi has a strong incentive to retain power and influence in some manner – his control over the political machinery was a key tool in slowing the pace of various attempts to indict him for wrongdoing in the last two decades. At times this seemed to be the only ideology underpinning three separate Berlusconi governments spanning the last two decades.
In this context, Mr Berlusconi’s support will be critical for the next government, especially with growing talk that Mario Monti – a respected macroeconomist who had been an European Union Commissioner in the 1990s and 2000s – will helm a technocratic administration to try to tackle Italy’s woes. Mr Berlusconi has openly endorsed Mr Monti as a possible successor. It seems likely that any new government will have to include figures from both the opposition and the PDL.
Hence it is still early to count Mr Berlusconi out even after he leaves office. He has a good track record of political comebacks, aided by his retention of the levers of largesse. Perhaps more importantly, there has been no one in Italian politics that comes close to matching his personal magnetism and his chameleon-like ability to transcend Italy’s ideological and regional divisions. Expect to hear more from Mr Berlusconi in the months ahead.