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China invades Italy

Italy rolls out the red carpet for Chinese Premier Wen Jiabao. Berlusconi's public relations machine breaks down. Italy mulls larger Afghanistan engagement. Regulators investigate Vatican for money laundering. Pompeii emblematic of Italian "sloppiness." Minister calls director Tarantino an “elitist snob.”

Top News: Chinese Premier Wen Jiabao made an official state visit to Italy, agreeing to increase cooperation between the two countries in technology and environmental protection, and to double bilateral trade to as much as $100 billion within five years.

Italian Prime Minister Silvio Berlusconi made the most of the opportunity, bathing the Italian capital in red lights in honor of Wen and setting aside plenty of air time to cover the visit, both on state broadcaster RAI and on the Mediaset networks he controls.

The visit, according to the Italian press critical of Berlusconi, gave the prime minister a rare opportunity to appear statesman-like. Late last month, Berlusconi pulled off a dramatic win in a no-confidence vote that helped save his job. But since then thousands have taken to the streets of the capital in protest of the prime minister, and he has incurred the wrath of Jewish groups, the Vatican and the international press for an anti-Semitic joke the prime minister told at a rally and that was captured on film. To make matters worse, the prime minister has been told to rest for a week after unscheduled hand surgery.

Italy is also considering stepping up its role in Afghanistan after the death of four Italian peacekeepers there. According to Minister of Defense Ignazio La Russa, Italian fighter jets will be put on alert for possible Italian bombings in the country, pending parliamentary approval. It would be the first escalation of Italian military presence in the region in years.

Money: Italian finance sector regulators announced they are investigating the Vatican bank for alleged money laundering. An unnamed official from the bank has already been arrested and a key client, the Institute for Works of Religion, has had an account worth €23 million ($31 million) frozen pending the results of the probe. It is not yet clear whether the two events are connected.

According to reports, the investigation into the bank started more than a year ago, in September 2009, when Vatican banks were classified as non-European Union institutions, which are subject to stricter regulatory rules.

Meanwhile, the Italian economy continued to confound economists by growing faster than projected despite high unemployment levels and flat consumer demand. The latest economic figures show that Italian industrial production grew 1.6 percent in August compared to July on the back of strong exports. The growth is the strongest in seven months, and much better than the slight decline forecast by banks.

Italy’s leading daily, Corriere della Sera reported the historic site of Pompeii is paying the price for government belt tightening, with some of its most important attractions closed or falling into disrepair. The international press picked up on the story, calling the problem a “symbol of Italy’s sloppiness.” The site receives around 2 million visitors a year, the most of any rural Italian tourist attraction.

Elsewhere: Sandro Bondi, Italy’s Minister of Culture, said his office should pick the jury for the next Venice Film Festival. The statement came after controversy that emerged after “Pulp Fiction” director Quentin Tarantino, the president of the jury at this year’s event, handed out several top prizes at the festival to people he was close to.

But Bondi didn’t speak directly to that controversy, instead opting to attack Tarantino personally, calling him “an elistist snob” and arguing that the popular director “pays no attention to the sentiment and the tastes of people and of tradition.” Bondi argued that since the bulk of the money used to stage the 67-year-old festival comes from the government, it has a right to select the jury.

The call sparked an outrage in cinema circles but in the unlikely event Bondi gets his way, Venice would become the first major film festival to give the government a voice in selecting its jury.