Berlusconi-Led Political Crisis Looming in Italy; Mediaset Suffers
ROME – The political crisis sparked by parliamentary forces allied with billionaire media tycoon Silvio Berlusconi heating up -- and Berlusconi's Mediaset is paying a price.
Italian prime minister Enrico Letta hastily returned from New York to meet with President Giorgio Napolitano in an effort to stave off the crisis that has threatened to boil over as Berlusconi's allies threatened to withdraw support for the Letta government if Parliament takes away Berlusconi's Senate seat. The vote is scheduled for Oct. 4.
Earlier in the week, Napolitano scolded Berlusconi supporters for threats against the Letta government.
The debate on that seat was precipitated by a Supreme Court ruling to uphold a lower court's conviction against Berlusconi on tax evasion and false accounting in connection with content acquisition deals between Berlusconi's Mediaset and U.S. studios.
The brewing crisis has been bad news for Mediaset, one of Europe's largest television and cinema conglomerates. The shares have risen in only one trading session since Sept. 16, losing nearly 10 percent of their value over that span before closing trading Friday at €3.13 ($4.16). Analysts said investors are worried that a prolonged political crisis involving Berlusconi could cause problems for the company.
Until the latest stretch, Mediaset shares had been among the biggest gainers on the Italian Stock Exchange so far this year.
If Berlusconi's allies pull their support, the Letta government would almost surely collapse. But if the 76-year-old Berlusconi makes the government fall for clear reasons of self-interest, it could hurt his political support and possibly damage his chances for another political comeback in the future.
Letta and Napolitano are expected to meet over the weekend to seek a solution to avert a crisis.