Kai Ryssdal: What seems to be happening in Europe — in Greece Friday and Italy today — is that prime ministers who’ve long since worn out their political welcomes win key votes, and then lose their jobs all the same.
Berlusconi did win a key budget vote in Italy today, but later said he might still resign. It’s all very complicated, which is why we put our European bureau chief Stephen Beard on a plane to Rome this morning. Hello Stephen.
Stephen Beard: Hello Kai.
Ryssdal: So what is — this going to sound like a basic question — what’s happening?
Beard: Who knows, Kai. It’s getting very complicated here. Various reports this evening say that Berlusconi has offered to resign as soon as he gets his austerity and economic reform measures through the parliament. It’s not clear when that will be, or whether Berlusconi’s simply playing for time, because he suffered a very serious parliamentary setback today. He won his vote on the state budget, but it was a humiliating victory — he only won because the opposition abstained and he lost his overall majority. So he’s very severely weakened, and the main opposition party have been threatening to have a vote of no-confidence in him. So who knows whether Silvio is wriggling and trying to avoid the further ultimate humiliation of losing a vote of confidence in parliament.
Ryssdal: So let’s play this out, then: If he does resign once the austerity budget passes, can we then say, OK the opposition’s going to come in and get things taken care of, and this crisis will be eased? Can we say that?
Beard: Well, financial markets, investors will be hoping that the opposition doesn’t come in because the opposition is left of center, and investors fear that if they’re running the government in this country, they may actually try to thwart these measures of austerity and economic reform. What seems to be most likely to happen in all this chaos and confusion is that if Berlusconi goes, what may follow him is a government of national unity, rather like the one they’re trying to achieve in Greece at the moment — a government that could run things for about a year, put some of the reforms through and then stand aside for a general election.
Ryssdal: What do you suppose happens then, just to preview Bob Moon’s story, what’s going to happen in financial markets in Italy come tomorrow?
Beard: If the markets believe that Berlusconi is going, they will probably bounce. This has been the pattern of things — as soon as rumors emerged that Silvio was quitting, stock markets across Europe rallied. And then as soon as he quashed the rumors, they fell back again. The markets do believe that Silvio Berlusconi is part of the problem. However, there is also an economic and financial problem: Italy does have a huge amount of public debt, and investors and markets will not be happy until Italy takes decisive steps to get that debt under control.
Ryssdal: Understanding that you’ve only been on the ground for six or eight hours, Stephen, what are you hearing from regular Italians? And I imagine it’s been cab drivers and hotel people so far for you.
Beard: Indeed, and this is before the news of Berlusconi’s on-again-off-again resignation. They’ve been rather transfixed, actually, by the political drama — whether or when Berlusconi was going to fall. That’s been the main preoccupation. But there is also a nagging sense among some of the people I’ve been talking to here that some pretty tough times could be on their way.
Ryssdal: Stephen Beard in Rome for us. Stephen, thank you.
Beard: OK Kai.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.