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The billionaire’s austerity may include colorful ideas, including a measure aimed at his estranged second wife.
ROME, Italy — Italian Prime Minister Silvio Berlusconi is under serious pressure, and today he will have to answer for his government.
Never mind the tangle of investigations over cronyism and bunga bunga parties. This time, the heat comes from Europe’s leading duo — German Chancellor Angela Merkel and French President Nicolas Sarkozy. They matter to Berlusconi and Italy because their support could be critical to keeping debt-swamped Italy solvent.
At a press conference last the weekend, Merkel and Sarkozy gave Berlusconi a public dressing-down for his failure to promote growth and address Italy’s debt, which has soared to 1.9 trillion euros. That’s 120 percent of Italy’s gross domestic product, or twice Europe’s legal limit.
The duo has demanded that Berlusconi present a new economic plan by Wednesday, Oct. 26. In response, Berlusconi has lashed out at this infringement on Italian sovereignty.
But he has also snapped to attention, rushing to come up with a plan. The problem: According to Italian press reports, the Berlusconi plan may deeply disappoint.
The plan hasn’t been made public yet. On Wednesday morning, Italian news agency Ansa reported that some progress has been made toward a key reform: raising Italy’s public sector retirement age from 65 to 67, although a loophole promises to diminish the effect of that change.
Other ideas floated are far less promising — and in some cases, borderline ridiculous. They reportedly include a mix of one-time and ad-hoc measures aimed at bringing some money to Italy’s coffers — or, in one case, to put the screws on Berlusconi’s estranged second wife and their children.
Before we list these measures, allow us to stress that Berlusconi’s economic plan is no small matter for Italy, Europe or the world.
What’s at stake here is the survival of the euro itself: were Italy to fall into a Greek-style crisis, the euro zone’s third largest economy might prove too big to save, especially with economic powerhouses Germany and France already reeling under the weight of the bailout. An Italian "credit event" would have cataclysmic consequences on the continent’s banks.
This week, the pressure has brought Berlusconi’s government to the brink of collapse. But the media tycoon-turned-politician appears to have survived once again. After frenzied meetings that went well into the night, a tentative agreement has been reached.
Berlusconi is handing his European partners a 15-page “letter of intent” spelling out his government’s next steps. While, he is famous for making boastful promises that often fail to bear results, here's an idea of what the letter might include: