Still in league

The Northern League is growing restive inside Italy’s government. This poses a new problem for Silvio Berlusconi

 SELDOM has Harold Wilson’s quip about a week being a long time in politics seemed more apt. A week ago Silvio Berlusconi, Italy’s prime minister, was in a fix. His candidates had been decisively rejected in mayoral elections in Milan and Naples. More than half the voters had ignored his advice to abstain in referendums that negated some key parts of his government’s legislative programme. The opposition was baying for his resignation.
A week later and his adversaries are on the defensive. Mr Berlusconi’s government won a confidence vote in the lower house of parliament, by 317 votes to 293; the first time he had obtained an outright majority since the summer of 2010, when his longstanding ally, Gianfranco Fini, split, taking several deputies with him. The opposition, fearing more defeats, twice shrank from tabling further confidence motions. In speeches to parliament, Mr Berlusconi exuded resolution. There was no alternative to his coalition with the Northern League, he said, and it was his “firm intention” to carry on to the next election, due in 2013.
What brought about the change? The most important event took place in a field north of Milan. The pratone, or big meadow, outside the town of Pontida is where the Northern League meets every year amid a forest of flags emblazoned with its favoured symbols, the cross of St George and a green and white “alpine sun”. This year the gathering was particularly significant because the League’s charismatic founder and leader, Umberto Bossi, was expected to lay down terms for continuing in government.
The League’s 59 deputies and 26 senators wield the power of life and death over Mr Berlusconi’s government. What if they were to give him the thumbs down? The temptation is there: the prime minister’s approval rating has dipped below 30% and the League is suffering from contagion. Yet for this very reason the result of toppling Mr Berlusconi, as Mr Bossi reminded the crowd at Pontida, would probably be to let in the left. Since the League’s leader has steered his party so far to the right, it would have enormous difficulty in forging any alliance with the opposition—and that is assuming the party would win enough seats to be of any use.
Yet Mr Bossi duly made his demands. He wants Italy to stop bombing Libya to stem the flow of refugees across the Mediterranean. He wants up to four ministries transferred from Rome to the north. And, most controversially, he wants tax cuts at a time when Mr Berlusconi’s hard-pressed finance minister, Giulio Tremonti, is struggling to reduce the budget deficit to ensure Italy does not go the same way as Greece. But Mr Bossi’s demands were not conditions; he made clear that he would stand by Mr Berlusconi for the next two years.
The effects were not long in coming. Italy’s president, Giorgio Napolitano, stamped on any notion that Italy might renege on its NATO commitments, and the League’s negotiators failed to secure any ministries (although they did win a promise of some representative offices).
What about taxes? This is of wider European concern. Italy is potentially at risk of being engulfed by the euro crisis, as Jean-Claude Juncker, head of the euro group of finance ministers, has pointed out. Its public debt will exceed 120% of GDP this year. A week ago Moody’s said it was considering downgrading Italy’s credit rating. Far from contemplating tax cuts, Mr Tremonti is reportedly working on a package of measures to trim the deficit by another €40 billion ($58 billion).
In his speeches to parliament, Mr Berlusconi said a tax-reform bill that he plans to unveil before the summer recess would “not open holes in the budget”. But he also said it would cut the number of income-tax rates to three, and that they would all be lower. It would seem possible to square the circle only with tax rises elsewhere or more spending cuts, in a society where the pain of Mr Tremonti’s earlier austerity measures is starting to be felt. On June 22nd there were clashes between police and teachers outside parliament.
Nor are social tensions Mr Berlusconi’s only problem. A deep rift has opened within the Northern League between a so-called “magic circle” around Mr Bossi and a group that looks increasingly to Roberto Maroni, the interior minister, seen by some as an alternative to Mr Berlusconi. Discord in the League risks destabilising the government, or even breaking it apart.
For the moment, though, the durable Mr Berlusconi looks safe. He would doubtless approve of another of Harold Wilson’s aphorisms. “I know what’s going on,” he told a rally in 1969 as he faced a similar crisis. “I’m going on.”
writen by : http://www.economist.com/node/18867308