‘Blundering Berlusconi’ Under Fire From Italy’s Business Community
Milan. Italian businessman Mario Cortella can barely contain his embarrassment at the latest revelations of Prime Minister Silvio Berlusconi’s sexual escapades — at a time when Italy’s economy is in trouble.
“When we go abroad, our colleagues ask us: How do you manage with someone like that?” said Cortella, head of Open-Kristallux, a small bathroom fittings business in the Venice region, one of the Italy’s wealthiest areas.
“His bragging, his jokes, are negative, they’re hurting Italian companies.”
It is not just the scandals that are bothering Italy’s vibrant business world — it is a perceived slowdown in reforms that is holding the country back.
“The country is paralyzed and the government is not taking the initiative at a very difficult time for the economy,” Emma Marcegaglia, head of Confindustria, Italy’s powerful employers federation, said earlier.
She called on Italy to regain some institutional pride as “a new wave of mud undermines the credibility of institutions and the government.”
In a less pointed way, Mario Draghi, chief of the country’s central bank, made similar points, warning that Italy needed to increase its competitiveness and proceed with much-needed structural reforms in order to recover growth.
“The difficulty that the Italian economy has in growing and in creating revenue should not cease to worry us,” he said.
“We could be at a crossroads” between growth and decline due to a lack of attention to the country’s structural problems.
Draghi pointed in particular to a lack of competition in the service sector, the relatively small size of Italian companies compared to European rivals and a labor market divided between short-term contracts and full job security.
Draghi, who is also head of the global Financial Stability Board, said Italy had been “incapable of growing at a sustained rate for years” and pointed to “a clear loss of competitiveness compared with our main European partners.”
Italian newspapers have also criticized the inaction in Parliament for weeks, a charge rejected by Berlusconi, who says the government has been busy.
But Berlusconi is facing a difficult time because of a tense rivalry with his once loyal ally, Gianfranco Fini, the parliamentary speaker.
Meanwhile, Italy’s economy is in bad shape, according to experts, with the Bank of Italy forecasting growth of just one percent this year and in 2011.
It is an ironic turn of events for a man who has frequently boasted of his business prowess and is one of the richest people in the country due to the media empire, Mediaset, which he founded and continues to control through his family.
But Berlusconi’s divorce with Italy’s business community appears to be definitive.
A research group set up by Luca Cordero di Montezemolo, head of Ferrari, made waves recently by criticizing Economy Minister Giulio Tremonti for his “incapacity to think about growth” and his insistence on budget rigor.
But Labor Minister Maurizio Sacconi defended Berlusconi, saying he promised to speed up reforms in Parliament. “Anything can be said except that the government is paralyzed,” he said.