Rome—The day after. The capital was basking under a golden November sun, looking very much the eternal city. Hard to believe that the political order was in meltdown, tempests were whipping up the bond markets, and default—a stunning prospect for one of Europe’s largest economies—was being talked about.
On November 8, Silvio Berlusconi had finally announced he would step down as prime minister, following a routine budget vote on which his majority came up short. Berlusconi had been losing credibility with Italy’s business and financial class for his cavalier approach to the recession and the debt crisis. The butt of heavy European sarcasm and a virtual pariah at the recent G-20 meeting in Cannes, he had finally lost face even among his party faithful.
Yet there were no celebrations at Berlusconi’s departure; even “anti-climax” is too strong a word to describe the mood. Soon, it seemed, Italy might have a new government that somebody—the financial sector, the European Union, the Italians themselves—could believe in. And maybe, nearly eighteen years after it was born, Berlusconism (that seemingly comical political formula that united enriching the few with demagoguery, corruption and populist dreams) was finished.
Maybe. But Italians were wary. They have seen Berlusconi rise like the phoenix from his ashes before. Not to mention that he leaves Italy in metaphorical ashes. Announcing his resignation, he vowed to depart only when the austerity measures promised to the EU had been presented and had cleared Parliament. It was rumored he hoped to drag out this process for weeks and then have Parliament dissolved and call immediate elections. That same day, the yields on long-term government bonds soared over 7 percent, punishing for the economy and impoverishing for the public coffers. Italy was leaderless and rudderless, except for its respected President of the Republic Giorgio Napolitano, the only former Italian Communist Party official ever to serve as head of state and a man known as an impeccable public servant.
Napolitano intervened quickly, insisting that the austerity measures be approved over the weekend and that Berlusconi step down immediately afterward, before the markets opened on Monday. He also, uncharacteristically, stepped into the political fray to make it clear he didn’t favor immediate elections but an interim government of qualified ministers that could push through possibly unpopular reforms with broad bipartisan backing. His choice to replace Berlusconi, he indicated, was economist Mario Monti, a veteran European Union Commissioner.
Such an interim government was not a popular idea before the crisis erupted. Northern League leader Umberto Bossi, Berlusconi’s ally, had been eager to go to the polls in the event Berlusconi lost his majority, although many in the prime minister’s own party feared they would be trounced in elections. Much of the opposition had been in favor of voting as soon as possible, from the anti-Berlusconi party Italia dei Valori, to segments of the large, center-left Partito Democratico to the left-wing Sinistra Ecologia Libertà under Nichi Vendola.