Mr. Berlusconi and his finance minister and chief ideologue, Giulio Tremonti, now have a golden opportunity to build on these succsses by exploiting their huge parliamentary majority to bring in sweeping supply-side reforms. The question is whether they will take it. The ousting of the far-lef from parliament may risk making confrontations over reforms or spending cuts worse. But if the government succeeds in reforming, our verdict on Berlusconi would have to be tempered by the acknowledgment that even he is capable of improvement. Unfortunately there are ground for scepticism about new government’s reforming credentials.
Mr. Tremonti has taken railing against globalisation as the primary cause of Italy’s (and Europe’s) problems. The Northeren League, wich did well in the election, is even more overtly anti-immigration and protectionist. Mr. Berlusconi’s own words about the future of Alitalia, the country’s sickly airline, suggest that he is keener on state-fostered national champions, however inefficient, than on the discipline of the free market. Indeed he and Mr. Tremonti often prefer to cast blame on the EU, the euro and the European Central Bank than to accept that Italy’ ills are largely home-grown.
The Economist, April 19th 2008
