Berlusconi back on top in Italy

Italy may have its most stable government since the end of World War II as Silvio Berlusconi returns for a third term as Prime Minister.  The Greens and the Reds have no seats in Parliament, and the nation has essentially settled on a two-party system.  Whether it lasts depends on whether Berlusconi can deliver on his campaign promises to reduce taxes and bolster a crumbling infrastructure without angering the EU:

Silvio Berlusconi was last night set to return to power at the head of Italy’s most rightwing government since he first came to office 14 years ago.

Projections from the general election held yesterday and on Sunday gave his Freedom Folk movement a convincing victory over Walter Veltroni’s centre-left Democratic Party (DP). …

For the first time since the second world war, Italy will have a parliament cleanly divided between two main groups, which should bring it stability. But Berlusconi’s triumph will send a shiver of apprehension through Brussels, where memories are still fresh of the way his government let Italy’s public finances run out of control, threatening the stability of the euro. Romano Prodi, the former European commission president and Italy’s ex-prime minister who narrowly defeated Berlusconi two years ago, reversed the trend. But to cut the budget deficit, he made the centre-left deeply unpopular by raising taxes and clamping down on evasion.

Berlusconi’s return may be seen as good news, but the best news from this is the relative stability of the Italian government.  Italy has made itself famous for changing its governments like fashions from Rome, which makes Italian politics interesting yet exhausting.  Settling into what is essentially a two-party system will allow for better planning and more reliability.  The departure of the Greens and Reds is also a welcome development.

However, Berlusconi needs to show some results with this landslide win.  Italy’s economy has stumbled, and as the Guardian points out, has now been outstripped by Spain.  He wants to privatize many of the national holdings of the Italian government, which would not just bring cash but relieve the government of maintenance costs as well.  That could help in reducing the tax burden on Italians and spur greater investment in the private sector.

What does this mean for American foreign policy?  We got along well with both Romano Prodi and Berlusconi, so it shouldn’t change much.  Berlusconi was marginally better at the war on terror, and we may see more cooperation on Afghanistan from Berlusconi, assuming the economy improves.  It is interesting to see a conservative reprise in Italy on the heels of Nicolas Sarkozy’s victory in France.  Could Western Europe be tilting a bit more to the right?  That could have some significant impact for the US if it continues.

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