Berlusconi Could be Maneuvering to Make New Italy Gov't Collapse

Silvio Berlusconi - Possible Return to Politics and Legal Charges

Disgraced former Italian Prime Minister Silvio Berlusconi is apparently planning a return to politics. The 75-year-old media billionaire will “probably” run for the prime minister post again in 2013, the head of the political party Berlusconi founded said this week, Berlusconi continues to face several open lawsuits, alleging tax evasion, corruption and paying an underage girl for sex.

The billionaire media tycoon could be eyeing another run for office even as he waits on a legal judgement that could include a lifetime ban from politics.

ROME – Speculation is on the rise that Silvio Berlusconi, Italy’s controversial media tycoon and three-time prime minister, could be maneuvering to instigate the collapse of Italy’s government for the second time in less than six months, while pollsters say Berlusconi would likely emerge victorious from a new round of elections.

Italian Prime Minister Enrico Letta took office last month in the wake of a nine-week political crisis that concluded only after Berlusconi and other key figures agreed to put aside their political differences to form an alliance. But with support from across the political spectrum, the government has been unable to do much, and it now appears it could be on unstable ground.

The central issue could prove to be a controversial property tax made into law last year to help pay down debt. Berlusconi this week vowed to repeal the tax in June, though he has no power to do so and Letta, the prime minister, has not given his support to a plan to permanently repeal the tax. If Berlusconi doesn’t get his way on the measure, he could pull his support for the Letta government, which would collapse without a parliamentary majority.

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Beppe Grillo, the former comedian turned activist who is now the official leader of the opposition, is among those who believe Berlusconi will do just that: In an interview with the Belgian magazine Le Soir, Grillo predicted Berlusconi would force the government to fail in the next several weeks.

Berlusconi’s forces did the same thing in December, forcing the collapse of the government of Mario Monti and leading to the inconclusive February elections that eventually led to Letta's fragile coalition.

Unlike December, Berlusconi appears to have the strongest political party supporting him. Pollsters say that if elections were held today that Berlusconi would likely earn more votes than any other leader. The polling firm Opinioni said that in a hypothetical election Berlusconi would likely earn at least 8 points more than any rival.

"Berlusconi appears to have the support of about 30 percent of Italians," said Maria Rossi, Opinioni's co-director. "Far from a majority, but more than anyone else."

The clock may be ticking against Berlusconi. Prosecutors in a case alleging Berlusconi was guilty of abuse of power and paying an under-age girl for sex, have asked for a six-year jail term and a lifetime ban from politics for the 76-year-old billionaire. A verdict is expected June 24, and if the sentencing is in line with prosecutors’ requests it would present a new obstacle to a Berlusconi run (it is unclear if he would be permitted to seek office if a conviction in the case was under appeal).

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Berlusconi was already sentenced in two other cases: to a four year term in connection with tax fraud for Mediaset, the television and cinema giant Berlusconi controls, and a further year behind bars in a wire tap case. Both verdicts are under appeal.

The turmoil has started to take its toll on Mediaset, which has been one of the strongest performers on the Milan-based Italian Stock Exchange over the last six months. The company’s shares closed trading Wednesday at €2.45 ($3.14), more than double their all-time low of €1.17 ($1.49) set in December. But anaysts have started to downgrade the shares going forward. Earlier this week, Bernstein Research issued a target prices of €1.65 ($2.11) for the shares, citing Berlusconi’s legal woes and political jockeying as factors hurting the company’s medium-term prospects. 

Twitter: @EricJLyman