Jan. 29 (Bloomberg) -- Silvio Berlusconi has a recipe for redemption in Italy, where recessions are recurrent and corruption pervasive: smile, deny and promise tax cuts.
The concoction has proved potent with repetition on Italian television, a medium the billionaire revolutionized before entering politics 20 years ago. He drew double the viewers of Lance Armstrong’s initial doping admission in one showdown with a long-time adversary.
The twice-divorced, 76-year-old grandfather has spun ratings into support as he appeals a tax-fraud conviction and stands trial on charges of paying for sex with a minor. Fourteen months after his third stint as premier came to an abrupt end as his missteps worsened Europe’s debt crisis, Berlusconi is second in polls before elections on Feb. 24-25.
“He is unbreakable,” ex-Chamber of Deputies Speaker Pier Ferdinando Casini, a former Berlusconi ally and current rival, said Jan. 23 at Rome’s foreign press association. “Berlusconi is a superb salesman. He is a man without peer in the election campaign. You have to acknowledge his skill.”
Revelations of shoddy accounting at Banca Monte dei Paschi di Siena SpA may give him a further boost. Berlusconi has gone on the attack against front-runner Pier Luigi Bersani, whose Democratic Party controls the bank’s largest shareholder.
Berlusconi’s resurgence highlights risks to European policy makers’ expressions of confidence that the worst of the market turmoil in the euro area has passed. He was reprimanded by then-European Central Bank President Jean-Claude Trichet in August 2011 for failing to take necessary actions to fix Italy’s finances -- tax increases and budget cuts since implemented by Mario Monti, his unelected successor.
Ten-year borrowing costs in Italy, Europe’s second-biggest debtor after Greece and its fourth-largest economy, have fallen more than 3 percentage points from the final days of Berlusconi’s government in November 2011 to about 4.2 percent.
Berlusconi says he will roll back Monti’s austerity and demand allies in the European Union, starting with Germany, do more to promote stimulus.
“The Italians are surely not daft enough to vote him back into office,” Michael Fuchs, a deputy parliamentary leader of German Chancellor Angela Merkel’s Christian Democrats, said in a telephone interview. “The type of policy he represents helped get us into this mess in the first place.”
Even with his political revival, Berlusconi may be limited to a spoiler’s role, according to Maurizio Pessato, head of the pollster SWG Institute. “There’s room to grow, but certainly not enough to entertain thoughts of victory,” said Pessato. “He will make more gains because Italy’s center-right electorate is fairly broad. But the limits are clear.”
Berlusconi is using his TV exposure, which according La Stampa totaled 63 hours from Dec. 24 to Jan. 14, to jab at his competitors. Monti is a political opportunist who failed to protect taxpayers from potential losses when he approved a bailout for Monte Paschi last year, Berlusconi has said. Bersani, a former communist, hasn’t turned his back on the ideology of his youth, Berlusconi has said.
“I’m playful, I’m optimistic, I’m upbeat. I say the things that have to be said, but I know how to say them with humor and irony,” Berlusconi said in an appearance on Canale 5, a TV station owned by his Mediaset SpA.
Berlusconi’s push against austerity marks a contradiction. It counters the support he gave to Monti’s tax increases from November 2011 to December 2012. Berlusconi has refused to acknowledge any incoherence, laying the blame for Italy’s recession -- its fourth since 2001 -- on Monti.
“The problem is we live in a political system that tolerates a high degree of deceit,” said Giovanni Orsina, a professor at Luiss Guido Carli University in Rome, who is writing a book about Berlusconi’s political appeal. “A shameless lie by Berlusconi is less worrisome. He is not disguising himself as a serious person, while the others are.”
Voters are accustomed to denials from Berlusconi and his peers given the routine, often inconclusive, conflict between parliament and the courts. More than 100 of 949 national lawmakers have been targeted by investigations, indicted or convicted of crimes, the newspaper La Stampa reported in November. Convictions aren’t considered definite until they are confirmed by the country’s highest court.
Berlusconi is appealing an October tax-fraud conviction that carries a four-year prison sentence. He is standing trial in Milan on charges of paying a minor for sex, then using the power of his office to cover his tracks. He denies the charges. While Bersani has adopted “A Just Italy” as his campaign slogan, the trials win Berlusconi sympathy, even among ex-supporters.
“He didn’t accomplish anything, and this is beyond discussion,” Massimo Zuccherini, an unemployed former Berlusconi voter in Abruzzo, said of the billionaire’s record. “But you also have to say that Berlusconi was subjected to judicial persecution.”
Berlusconi has accused prosecutors of trying to destroy him politically. By his own reckoning two years ago, he had faced 105 probes and trials, 2,500 court hearings and spent more than 300 million euros ($404 million) in legal fees since entering politics in 1994.
In civil court, his Fininvest SpA holding company was ordered to pay 540 million euros to a business rival for bribing a judge in a takeover battle dating back to 1991. Berlusconi has said he had just one trial before entering politics at the age of 57.
Berlusconi’s coalition, which has appealed to entrepreneurs and conservative Italians, had 28 percent support in an EMG poll conducted Jan. 24-25 and released late yesterday. That was unchanged from the previous week, while Bersani’s center-left group slipped 0.3 percentage points to 36.8 percent, and Monti’s forces fell 0.7 percentage points to 14.5 percent in the poll. Beppe Grillo’s euro-skeptic movement had 13.5 percent support, according to EMG.
Berlusconi jump-started his campaign in December when criticism from his party’s general secretary, Angelino Alfano, presaged a bid to topple the government. Berlusconi then called for an end to its biggest austerity measure: a tax on primary residences. As prime minister in late 2011, he had committed Italy to a structural balanced budget in two years. His party voted to pass the property tax.
Berlusconi, questioned by Michele Santoro, a journalist he had fired from state-owned TV in 2002, blamed communists. Those promoting “the most inhuman and criminal ideology in the history of man” held sway over Monti, Berlusconi said.
The rebound in support for the former premier “has without doubt happened, and the Santoro show and other recent public appearances have helped,” said Renato Mannheimer, head of polling company Ispo Ltd. “We’ll have to see if it lasts.”
That 150-minute encounter drew almost 9 million viewers, or about 15 percent of Italy’s population. That compares with the 3.2 million in live U.S. viewership that Nielsen said Oprah Winfrey garnered for her exclusive with Armstrong.
There’s also the sex. While Berlusconi denies paying for it, he will engage even adversarial reporters about his love life and billionaire lifestyle, offering glimpses into the prime minister’s mansion, his Sardinian estate and the owner’s box at his A.C. Milan soccer club.
The “beautiful girls” brought two at a time by Gianpaolo Tarantini, arrested in 2009 and accused of procuring prostitutes for the billionaire, revived an otherwise bored Berlusconi at routine political dinners, the ex-premier said Jan. 15 on television broadcaster La7. Berlusconi says he gave Karima El Mahroug, the woman at the center of his sex-with-minor trial, 57,000 euros to help her set up a business and avoid prostituting herself.
El Mahroug has denied having sex with the former premier, while acknowledging that he gave her money.
Berlusconi is still polling 20 percentage points below the 47 percent of the votes his coalition got when it won the 2008 election. That gap can’t be attributed to a deficit with women, Mannheimer said, even after the sex scandals and Berlusconi’s most recent divorce.
Berlusconi campaigned for Letizia Moratti as mayor of Milan, Italy’s business capital. And he had at least five women in his cabinets. To his female allies, that makes his public womanizing less of a concern.
“He has a particular sensibility and particular respect for women,” said Mariastella Gelmini, the education minister in Berlusconi’s last government. “When there’s an important decision to make, Berlusconi trusts feminine intuition more than male reasoning.”
Berlusconi, a cruise-ship musician in his youth, built a fortune as a real estate developer before patching together the first private television networks to span the entire country. He took on the stodgy programing of state-run broadcaster RAI by filling his networks with dubbed U.S. dramas like “Dallas” and “Dynasty” and original game shows, many of which featured dozens of smiling, scantily-clad women.
The programing focused on a conception of the “good life,” an outlook that Berlusconi’s political appeals would later evoke, according to Professor Alexander Stille of Columbia Journalism School.
“Berlusconi helped shape contemporary Italian culture through private television,” said Stille, author of “The Sack of Rome: Media + Money + Celebrity = Power = Silvio Berlusconi.” “Then he shaped the electorate that then elected him.”
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