Nov. 26 (Bloomberg) -- Italian Prime Minister Silvio Berlusconi’s era is fading into the “sunset” after his government failed to bring an end to the country’s economic crisis, former European Commission President Romano Prodi said.
“How long will be this agony? Nobody can tell you, because these passages are always difficult,” Prodi said late yesterday in a Bloomberg Television interview when asked if the government will survive confidence votes next month. “The Berlusconi period is, in any case, in the sunset, you know, going down.”
Berlusconi’s government faces a do-or-die test on Dec. 14, more than two years before its term ends, when parliament holds confidence votes after former ally Gianfranco Fini broke ranks with the premier. The comments by Prodi, twice prime minister of Italy, are the first he’s aimed at his former political opponent since four government members who back Fini resigned this month in a move that threatens to topple the administration.
“In these two years of government, it was clear that the first goals were not shared by the coalition and were not fit to end a long, lasting crisis for the country,” Prodi said in Sarteano, Italy, where he was attending an economic conference held by the main opposition Democratic Party.
Prodi, 71, denied any ambition of re-entering politics. “No, not at all, I made an honest choice,” he said. “I teach in the United States and Shanghai, I do like what am doing and I do think you have to show people that, you know, politics is a mission, is maybe temporary, and nobody is indispensable in national political life.”
Prodi shepherded Italy into the euro as prime minister from 1996 to 1998. He led the Brussels-based commission, the EU’s executive agency, from 1999 to 2004 and served again as Italian leader from 2006 to 2008.
Italy, the euro region’s third-biggest economy, is unlikely to expand more than 1 percent this year and next as the recovery from the worst slump in six decades slows more than forecast, employers’ lobby Confindustria said Nov. 17. Italy may miss its goal of cutting the budget deficit to below 3 percent of output in 2012 if growth proves weaker than the government’s projected 1.2 percent this year and 1.3 percent next, the Organization for Economic Cooperation and Development said in a Nov. 18 report.
Prodi described Italy’s economic progress in the past decade as “miserable” and said the country must “turn the page in terms of growth, labor relations, education, research and development.” He added that “in contemporary economy you may increase productivity only if you attract foreign investments, and from this point of view Italy is a disaster.”
Berlusconi said on Nov. 24 he expects to win the confidence votes by a broad margin and that political instability may hurt the country’s credit rating and make it more expensive to sell bonds. He also called on Fini, a co-founder of his People of Liberty party, to “take a step back” before trying to topple the government at a time when investors are shunning the bonds of high-debt euro-area nations after Ireland said it would seek a bailout.
Italy’s borrowing costs rose at a sale of 8.5 billion euros ($11.3 billion) of six-month treasury bills yesterday as fallout from Ireland’s debt crisis sent financing costs higher in other nations in the region. The yield premium investors demand to buy Italy’s 10-year debt over German bunds reached a euro-era record of 190 basis points on Nov. 12. It was at 173 basis points today as of 11:44 a.m. in Rome.
European Central Bank executive board member Lorenzo Bini Smaghi said late yesterday in an interview with RAI television that “if Italy respects the rigor in public accounts and pushes through agreed budget measures, it won’t have any problems.”
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