BERLUSCONI’S second government, constructed with some deliberation in the aftermath of the general election victory of the Casa delle Liberta on 13 May, has undoubtedly lowered Italy’s standing within the European Union, despite the consciously reassuring choice in terms of European diplomacy (although not the anti-globalisation movement) of Renato Ruggiero, the former WTO chief, as Foreign Minister.

During the Ulivo’s five-year period in office, especially during the initial phase up to October 1998 when Roman Prodi held the premiership, but to some extent even under his successors Massimo D’Alema and Giuliano Amato, Italy was treated as a major European nation on a par with Britain, France and Germany. Given the marginalisation of Italy during 1992-4, when her enforced exit from the European Monetary System was accompanied by the complete collapse of the political system that had existed since 1947-8, Prodi and his Finance Minister Ciampi had achieved the seemingly impossible in bringing Italy into the euro. Prodi's presidency of the European Commission – despite D’Alema’s devious motives in promoting it – represented a genuine recognition of Italy’s centrality within the EU, for there had only been one previous Italian president of the Commission and his tenure had proved very short lived and somewhat farcical.

That phase in which Italy’s political weight corresponded to her economic and demographic weight within the Union has clearly come to an end, for contrary to Berlusconi’s characteristically grandiose spin, his participation in the Downing Street Summit on 4 November does not represent a historic reversal of Italy’s totally humiliating exclusion from the unofficial Ghent Summit between the leaders of France, Germany and Britain, which preceded the official but more ceremonial European Union summit there. The Downing Street meeting was not an exclusive gathering of the leading countries of the EU, for in addition to Britain, France Germany and Italy, it included representatives of Spain, Belgium and the Netherlands, as well as Xavier Solana who in some rather ambiguous sense represented the EU as a whole in foreign and military matters, even if half the EU governments were rather resentful about not being invited, since the basis on which some of the smaller countries who did attend had been chosen seemed rather arbitrary to say the least – Blair seems to be on better terms with the Dutch Premier than the Portuguese one.

How has Italy’s return to the Second Division come about? I would argue that this relegation to the marginal status of 1992 owes more to the policies pursued by Berlusconi since he took office again than to any prejudices against him or against Italy held by other European governments. Despite the famous pre-election issue of The Economist setting out in some detail the reasons why the magazine’s editors believed that Berlusconi was unfit to govern Italy and other shorter articles in a similar vein in a variety of European broadsheets that spanned the political spectrum from right to left, there was in reality a somewhat wary and rather weary acceptance of the tycoon’s by now established place in Italian politics by European governments, as opposed to investigative journalists.

The Haider affair had made Berlusconi far less of an anomaly than he might otherwise have been. The European Union’s failure to pursue its initial ostracism of the Austrian government dominated by Jorg Haider’s far right Freedom Party with any consistency or vigour meant that the international outcry over the participation of the self-styled post-fascist Alleanza Nazionale led by Gianfranco Fini and the racist regionalist Lega Nord led by Umberto Bossi in Berlusconi’s first government in 1994 was unlikely to be repeated unless representatives of these parties carried out some overwhelmingly provocative action, and the increasingly harsh immigration and asylum policies of the British government under Blair meant that the agreed definition of what constituted acceptable treatment of migrants within the EU had shifted in a direction that would have given comfort to AN and the Lega. If Haider’s well-documented and widely known past statements about the Nazis were to be dismissed as irrelevant, any previous statements by Fini about Mussolini or for that matter any xenophobic outbursts by Bossi or his Lega associates, could not be regarded as having much significance either.

This is not to say that the French Socialists or the German Social Democrats might not have had some unease about AN and the Lega assuming a governmental role, in part because of domestic concerns about the fragmented but still potentially worrying Front National or the German Republikaner and DVU, but once the Austrian precedent had been set such issues had to be swept under the carpet.

Moreover, Blair – who had not in reality welcomed the possibility that the almost simultaneous arrival of Centre-Left governments in the four major Western European countries might have given for a concerted shift to Eurokeynesianism of the type dreamt of by Jospin and Lafontaine and had frequently allied himself with the Spanish conservative Aznar – may have secretly preferred a Berlusconi government to a Centre-Left one, even one that would have been led by a vacuous media-obsessed rightward-moving opportunist like Rutelli, a man clearly devoid of what Blair probably regards as the Old Labour characteristics of Lionel Jospin.

Blair’s attitude to Berlusconi and Italian politics has to be seen in the context of his semi-detached attitude to Europe, even if his fondness for Tuscany and Provence make him less Europhobic than his Chancellor, who spends all his holidays in the USA. After all, Berlusconi’s first government in 1994, with its Europhobic Foreign Minister Antonio Martino, had been the most overtly Eurosceptical Italian administration in recent times, something which may have been favourably recalled by somebody as determined as Blair to wreck any possible French, German or Franco-German project for ever closer union with either political or military dimensions. Blair’s close relationship with Rupert Murdoch, who probably shapes his line on the EU to a greater extent than either Gordon Brown or the Americans, would also have led him to have some sympathy for Berlusconi who has engaged in a number of joint enterprises with Murdoch and at one stage, when he seemed to be under serious pressure over the "conflict of interests" issue, flirted with selling his Italian television channels to Murdoch. I believe it would be wiser to refrain from comment on the allegedly crucial role played by David Mills, the fanatically New Labour husband of Blair’s culture minister Tessa Jowell, in allegedly giving Berlusconi considerable legal assistance over rather controversial matters relating to allegedly massive international capital flows that preoccupied certain Milanese magistrates. On the other hand, there is no similar risk of falling foul of Britain’s draconian defamation laws in highlighting the fact that Prince Strozzi with whom Blair spent some of his Tuscan holidays is widely known to be a supporter of Berlusconi’s Forza Italia rather than of the Ulivo.

Berlusconi’s initial actions after taking office for the second time suggested that he had learnt something from the negative experience of 1994, at least as far as the EU was concerned. He refused to yield to the demands of various party politicians who wanted to obtain the Foreign Ministry and instead appointed somebody with diplomatic and financial experience rather than a professional politician. Renato Ruggiero’s appointment was urged upon Berlusconi by FIAT chief Gianni Agnelli, who had leapt to Berlusconi’s defence in the closing days of the election campaign in the wake of The Economist’s attack. This gave rise to a certain amount of resentment from Fini who initially labelled the ex-WTO chief "a man imposed upon the government by FIAT". The appointment of Ruggiero, together with Berlusconi’s willingness to allow company mergers which were in the interest of FIAT and Pirelli, suggested that the television magnate had become less of an unpredictable populist maverick than he was in 1994 and would govern Italy in a way that accorded with the interests of the traditional economic establishment, and was therefore less likely to arouse criticism amongst respectable European Conservatives, whatever complaints might be made by born-again advocates of free competition on the increasingly neo-liberal Italian Centre-Left.

Berlusconi’s honeymoon period came to an end with the Genoa Summit of the G8 in late July. Berlusconi had imagined that Genoa would set the seal upon his new-found acceptance as a respectable European politician and had therefore spent his time during preparatory visits to the Ligurian port ordering the repainting of buildings and the rearranging of floral displays and attempting to ban local residents from displaying their underwear on washing lines anywhere within sight of the summiteers. Whilst these preoccupations may serve to illustrate Berlusconi’s vanity and love of display, probably necessary prerequisites for success in the popular mass media, they can hardly be presented as sinister any more than the dyed hair or the permanent suntan. During the summit itself Berlusconi was anxious to appear at the very centre of the international diplomacy and conspicuously consort with other world leaders.

In the light of all this it seems highly implausible that the great showman had any direct influence on the operational conduct of the police and carabinieri, either in relation to the killing of Carlo Giuliani in the course of the rioting on Friday or in relation to the police raid on the Scuola Diaz on the Saturday night. The behaviour of Gianfranco Fini, the AN Deputy Prime Minister, who, by Saturday at any rate, seemed to have taken a very direct interest in the operation of the security forces, is certainly susceptible to a more sinister interpretation, and the presence of other AN deputies at police headquarters has never been satisfactorily explained.

The extremely brutal, cold-blooded beatings administered during the raid on the Scuola Diaz, which seems to have been carried out solely to seize or destroy film and computer records of the security forces’ excessively violent behaviour during earlier clashes with demonstrators, rather than in response to any genuine threat from either the Black Blockers or the Genoa Social Forum, were disastrous for the Italian government’s image. Reports of subsequent torture of detainees at other locations over the next few days, accompanied by the infamous chant of "1,2,3, Viva Pinochet – 4,5,6, Morte a tutti gli ebrei" worsened matters still further. Some EU governments were genuinely shocked by the clear evidence not only of systematic police brutality but also of a significant minority of ideologically committed neo-fascists within the ranks of at least some sectors of the police and carabinieri. Other governments were forced to make criticisms in the light of ill-treatment received by their own nationals.

Regrettably the British government did not even fall into the latter category, with Blair and Straw acting as the foremost European apologists of the Berlusconi government’s treatment of the "anarchist travelling circus" whose "spurious cause" of anti-globalisation Blair had already denounced on May Day. Even the Austrian government made more vigorous, if probably hypocritical, complaints about the harassment of a Viennese street theatre group that British ministers did about serious and permanent physical injuries sustained by their own citizens.

Berlusconi’s determination to cover up the excesses of the security forces and to avoid the resignation of the Interior Minister probably ensured that the story ran on through much of August. However, whilst Genoa certainly evoked the spectre of Italian neo-fascism for some weeks, the events of 11 September meant that for practical purposes Berlusconi’s European colleagues were prepared to wipe the slate clean and in some cases even to accept his equation of the anti-globalisation movement with terrorism.

Berlusconi’s current standing amongst his colleagues owes very little to the Genoa events but a great deal to a combination of his determination to pursue his own personal agenda on matters relating to his own problems with the Italian criminal justice system, regardless of the ramifications for co-ordinated struggles against international terrorism, and his constant propensity to make major gaffes in public and refuse to apologise with any rapidity or pretence of sincerity. Berlusconi’s systematic campaign to repeal any laws that interfere with his own financial interests, legal or illegal, has been so rapid and so blatant that it would have given rise to some disquiet in any circumstances, but this has been greatly aggravated by the fact that these moves run counter to the emergency measures taken by the EU designed to increase international legal co-operation, ease extraditions, curb money laundering and monitor illegal traffic in arms, money or drugs that might directly or indirectly sustain the activities of the al-Qaida network in the aftermath of 11 September.

The Italian Centre-Left frequently has a naive and idealised sense of the moral concerns of other Western nations and governments, tending to forget that Giscard, Mitterand and Chirac in France and Kohl in Germany have all been subject to allegations of corruption, so it is very important to distinguish between those of Berlusconi’s actions which merely give rise to wry amusement, albeit indirectly lowering Italy’s standing as a credible partner, and those which actually arouse genuine anger.

It seems to me that Berlusconi’s total abolition of inheritance tax is unlikely to have caused much concern elsewhere in Europe. Undoubtedly, cynical diplomats would have reported to their ministers that it was clearly designed to allow Berlusconi to pass all of his enormous personal fortune to his children and was in no sense based on any rational cost benefit analysis of more general fiscal consequences. But in an era where no Western European government, not even Jospin’s which still uses the rhetoric of socialism on occasion, is fighting for increased equality and some, like Blair’s, seem to positively revel in increasing inequality, it is unlikely to have been deplored in principle.

The two laws that really have given rise to genuine annoyance have been the one about the admissibility in Italian courts of legal documents originating from abroad and the one about the return of illegally exported capital to Italy from abroad before the end of the lira/euro transition period. The aftermath of 11 September saw a whole raft of measures to increase European legal co-operation. In these circumstances it was hardly an appropriate time to make documents originating from abroad more or less inadmissible in cases coming before Italian courts. The new measure was doubly explosive because it actually made co-operation between Italian and Swiss magistrates more difficult than it had been over the last few years and in large measure rescinded an agreement between Italy and Switzerland which an earlier Italian government had virtually extorted from rather reluctant Swiss authorities. The Swiss magistrates themselves had been eager to help but frequently met with obstruction from their own banking system and politicians dependent upon that system for their own careers.

The new Italian law makes photocopies inadmissible and requires many documents to be certified as genuine by foreign governmental authorities as distinct from foreign judicial authorities. It also bans the use of summaries of financial transactions that might be provided by banks that are unwilling to provide original documents which would contain other information subject to conventions about banking secrecy. The overall effect of the law is to slow down the rate at which cases proceed, to the point where nothing is likely to reach a conclusion before a statute of limitations intervenes and many cases will not even reach the court room.

The reason for what at first sight appears an arbitrary, ill-conceived and regressive measure is the central role Swiss bank accounts have played in the web of dubious financial transactions that Berlusconi and his entourage like Dell’ Utri and Previti have been engaged in over the last couple of decades. Berlusconi is determined that not only will he be acquitted, either because of the absence of admissible evidence or because of the statute of limitations, in every single case in which he is currently on trial or under investigation, but that all his leading associates will also be spared the rigours of the criminal law; minor Fininvest functionaries can carry the can for their boss but major figures who have often been alleged to be key intermediaries between Berlusconi and the Mafia or secret services are an entirely different matter.

At any time this law would have undoubtedly increased the prevalence of a crudely stereotypical equation between the Italian political and business elites on the one hand and the Mafia on the other among other Western Europeans – particularly the British and the Germans – but its negative effects go further, since it would make it impossible to effectively conduct a prosecution for international terrorist activity, or the illegal flows of guns, drugs and money that finance it, in an Italian court, effectively turning Italy into a potential Mecca for bin Laden’s gangsters. To add insult to injury in terms of European jurisprudence, this law is effectively retrospective – otherwise it would be of little use to Berlusconi or Previti, since they are anxious to rule out as inadmissible some very damning evidence that has already been obtained.

Whilst I do not claim to have covered all the ramifications of the law on the inadmissibility of legal documents, I will now turn to the other new law, the one allowing the re-importation of illegally exported capital into Italy before the end of the lira/euro transition period on the payment of a nominal 2% penalty – probably rather less than the usual commission charge for illegal currency smuggling. Berlusconi and his media acolytes have presented this as a great money-spinner for the Italian treasury and emphasised that it does not apply to the proceeds of criminal activity. Since there are no objective checks and no mafioso is going to proudly proclaim that the lire he is bringing back into Italy were the product of large-scale heroin trafficking, this qualification is risible.

The new law not only assists the money-laundering activities of al-Qaida but also destroys the window of opportunity offered to law enforcers seeking to curb organised crime by the conversion of the old European currencies to the euro; the German authorities had seriously imagined that they could ensure that many East European criminals would be left holding vast quantities of useless D-marks with no legal value. Previously the main loophole for this kind of black money in the transition to the euro had been the rapid purchase of property in the Balearics and Southern Spain at greatly inflated prices for ready cash with no questions asked – the new Italian law offers a much more satisfactory solution to intelligent and farsighted criminals who prefer steady accumulation to conspicuous consumption.

A further controversial law which Berlusconi has introduced effectively decriminalises false accounting, reducing it to a mere civil offence. Given that Berlusconi has never made any effort to provide comprehensive accounts for either his original construction business or his subsequent media empire and has on occasions been charged with fraudulent accounting, the motivation behind the law is self-evident. Apart from the serious damage it will inflict on Italy’s image, one would imagine that it will make foreign companies very wary of doing deals with Italian partners because no contract is really enforceable if the penalties for fraud are no more serious than those for speeding or parking offences.

Berlusconi’s gaffes during European summits have played an important role in lowering Italy’s reputation. Ruggiero has done his best to keep his boss under control, all too aware that the kind of outbursts that Berlusconi makes in Italy and then uses his media power to deny having made, cannot be so easily covered up in front of foreign journalists. The more gullible amongst Berlusconi’s Forza Italia voters may still believe the regular but somewhat threadworn assertions that all hostile stories were invented by his enemies in the left wing media or that he was misquoted or taken out of context, but an international audience will not fall for such feeble and predictable tricks on a regular basis. Berlusconi’s first gaffe in June, when he harangued his fellow European leaders at inordinate length about having been the first leader to topple a Communist regime in a free election, made him a figure of fun in the eyes of Jospin, who had had enough dealings with French Communists to know that the Italian DS, let alone Prodi or Rutelli, bear no resemblance to Communism in any meaningful sense.

More serious by any standards was Berlusconi’s more recent Berlin tirade against Islam. Whilst he had made similar remarks to his fellow European leaders in private on previous occasions, they were all astounded to hear him give a lengthy public sermon on the superiority of European civilisation and the barbarism of Islam. It is very likely that some of them would have been aware of the degree of his historical ignorance, but all of them would have realised the damaging international implications of his remarks. From the start Blair had been aware that no Muslim allies could be recruited for a war against Bin Laden or Afghanistan if it was presented as a war against Islam, and he has gone out of his way to proclaim his acquaintance with the true message of the Koran, although how seriously Al-Jazeera viewers take this performance is of course another question. Bush, as a man of limited intelligence, emotionally dependent on the Billy Graham variant of fundamentalist Christianity that saved him from the clutches of the demon drink, managed to employ the fatal word "crusade" and blasphemously name a military operation "Infinite Justice" before his advisers learnt to keep him on message.

Given the massive effort the State Department needed to take to repair the unintentional damage caused by Bush’s incautious vocabulary, Berlusconi’s espousal of a vulgarised version of Huntington’s thesis of the clash of civilisations was the worst own goal for which the proprietor of AC Milan has ever been held responsible. Berlusconi’s rapid resort to the notion that he had been quoted out of context and shameless replaying to an Arab audience of a tape from which all the offending passages had been removed, only gave more ammunition to those eager to present him as a complete buffoon and Italy as a country unworthy of serious consideration.

In these circumstances the undiplomatic anti-Italian comments of Belgian ministers – who had an axe to grind not so much against Berlusconi as against Bossi, who had branded the Belgians a nation of paedophiles on more than one occasion – were somewhat predictable. A more serious result was Italy’s exclusion from the important pre-summit meeting between France, Germany and Britain in Ghent in October. Berlusconi’s efforts to explain away Italy’s exclusion in terms of these three countries having projects of their own like the Airbus A400M to discuss actually made things worse.

Berlusconi’s opposition to the Airbus project was bound to increase Italy’s marginalisation, as the Airbus seemed to be the one concrete manifestation of the plan for a common European defence programme about which so much has been heard over the last few years. Moreover, proponents of the project argued that it was the only way in which large numbers of European ground troops could be moved to any distant theatre of war without the Europeans having to beg for American assistance, an idea which had much more resonance in the context of the current "war on terrorism".

The Airbus A400M revealed deep divisions within the Berlusconi government between the Prime Minister and Ruggiero, the latter of whom believed that the diplomatic advantages of the project far outweighed its cost or even the belief of the Italian armed forces that it merely replicated existing equipment. The Defence Minister Antonio Martino emerged as the most fervent opponent of the project within the government, something which can only partly be explained in terms of Martino responding to the views of the armed forces just as Ruggiero echoed the views of the diplomats at the Farnesina. Martino is both a notorious Europhobe and a man who feels Ruggiero has usurped a ministry to which he had a prior claim, given his own role as Foreign Minister in the first Berlusconi government and his early membership of Berlusconi’s own party, Forza Italia. Rocco Buttiglione, the Minister for European Community Affairs from the Christian Democratic CDU, who resented his subordination to Ruggiero, was equally vocal in opposing the Airbus in newspaper interviews. There was much talk of Ruggiero’s position being under threat not just in the Italian press but in the Financial Times as well, and some articles that appeared in the German press expressing hostility to Ruggiero were said to be the product of leaks from Berlusconi’s entourage. Such public displays of disunity were guaranteed to lower the reputation not only of Berlusconi but also of Italy itself in the eyes of her European partners.

This collapse in Italian credibility gave rise to a wave of attacks on Prodi as well as Berlusconi in the European press in late October. At first sight this might seem a bit strange, since if Berlusconi tends to Euroscepticism, Prodi is far more of a Euroenthusiast than most heads of government. Prodi’s enemies were aware that his position had been weakened in May by the shift from Centre-Left to Right in the Italian administration and felt that if the right wing government was itself in disarray over Europe the chances of it rallying to a Prodi already in conflict with heads of government like Blair, who clearly prefers Solana to Prodi, if he has to invite a representative of the Commission to a summit, was minimal. In the event, Berlusconi did rally behind Prodi, claiming that the attack on the pair of them was all due to anti-Italian prejudice, a view that was in effect backed up by the Italian President Ciampi, who rallied to both his Prime Minister and the President of the Commission.

As this situation seemed to worsen by the day, the AN leader and Deputy Prime Minister Gianfranco Fini demonstrated that his political skills were far superior to those of Silvio Berlusconi by supporting Ruggiero, for whom he seems to have gained some respect, despite his initial fury at the appointment of the man allegedly imposed by FIAT. Berlusconi seems to have begun to backtrack – albeit in a rather incoherent fashion – from his original opposition to the Airbus, and the internal crisis seems to have been resolved, at least temporarily, on terms more favourable to Fini and Ruggiero than to Berlusconi and Martino, which is a better outcome in terms of Italy’s European credibility, although a strengthening of the Deputy Prime Minister’s standing could have negative implications on the domestic front.

Berlusconi’s position would be considerably weaker than it already is if he was not receiving such frequent assistance from Tony Blair. Blair, instead of coming straight home from the Middle East, went out of his way to meet Berlusconi on his way back from his disastrous encounters with Assad and Sharon, landing at Genoa airport at eleven at night. Blair’s midnight tryst with Berlusconi on Thursday 1 November – in the symbolic location of the Genoa Prefecture from which the police attacks on the anti-globalisation movement had been co-ordinated back in July, at which the two leaders discussed Middle Eastern affairs at a working dinner – was clearly designed to indicate Blair’s forgiveness of Berlusconi’s outburst about Islam and paved the way for Berlusconi’s subsequent invitation to the Downing Street Summit on Sunday 4 November.

It is crystal clear that Blair wanted Berlusconi to participate in the 4 November meeting and that the eventual list of participants in that meeting was longer than Blair would have liked, with a lot of last minute pressure from some of the smaller countries which were eventually invited. What is not so clear is whether Blair really wants a Big Four, including Italy, or a Big Five, including Italy and Spain. Given Blair’s longstanding friendship with the Spanish Conservative Aznar, the latter is a strong possibility and would suggest that Berlusconi is not quite as privileged as an interlocutor as he would like to be with Blair,² any more than he is with Bush, who has only belatedly rewarded his abject servility, symbolised by organising a pro-US demonstration in Rome on Saturday 10 November,³ by finally accepting the Italian offer of military assistance in Afghanistan. This assistance is unlikely to seem particularly useful to the Pentagon, for whom Italy does not currently have anything like the importance it had during the Wars of the Yugoslav Succession when geographical proximity greatly magnified its role.

Notes

1. It needs to be emphasised that one of the very first cases in which Berlusconi’s Italian lawyers have invoked the "made-to-measure" law on the admissibility of legal documents, referred to below, is the All Iberian case about offshore companies. The journalists Pier Francesco Fedrizzi and Marco Mensurati specifically refer to "The interrogations of the London solicitor David Mills, the lawyer entrusted with equipping the ‘reserved compartment’" as being a very important part of the evidence that Berlusconi’s lawyers are claiming to be inadmissible. See La Repubblica, 14 November, p.19.

2. The London meeting between Blair and Aznar on 9 November was highly publicised in the British media in a way that the Genoa meeting between Blair and Berlusconi and 1 November had not been. Moreover, Blair’s anxiety to ingratiate himself with Aznar was so great as to lead him to agree to direct negotiations with Spain over Gibraltar on terms that ignored the Gibraltarians’ right to self-determination in a manner reminiscent of Thatcher’s treatment of the Hong Kong Chinese.

3. Berlusconi’s pro-US demonstration attracted only 40,000 people, whilst a rival demonstration against the war in Afghanistan held in Rome on the same day drew at least 130,000. These figures are taken from the pro-war daily La Repubblica, 11 November, and may therefore underestimate the degree of Berlusconi’s humiliation.

This paper was presented to a seminar at the European Research Centre at the University of North London on 8 November 2001.