4 Nov 2011

Is Berlusconi under economic house arrest?

Is Italy now under the control of the troika – the European Central Bank (ECB), the International Monetary Fund (IMF) and the European Commission?

At a late night meeting with Germany and France, the Italian prime minister came under even more pressure to submit himself to external economic disciplines. I’ve also heard it was suggested to him that he open up a credit line to the IMF (as Poland has already) – that’s not a full-scale IMF intervention but not exactly a vote of confidence.

The German political establishment sees Silvio Berlusconi as a catastrophic menace and perhaps the biggest single obstacle to world economic stability. They would dearly like him removed from the political picture and it will be interesting to see what phone calls there are between now and next week between senior European figures and Italian politicians to, how shall we put this, reconfigure Italian politics.

Apart from heavy duty pressure on Mr Berlusconi, the focus was on how do you increase the firepower of the IMF to reassure markets that economies like Italy will not be allowed to go under. But I’m not sure the numbers being talked of in this project are seismic … I’ve heard talk of an additional $300bn which, if true, wouldn’t alter the weather (very wet and windy here in Cannes, by the way).

Bete noir of the G20 one notch below Silvio Berlusconi? The Mayor of Cannes, I hear, who delayed proceedings last night with an unscheduled attempt to get all G20 leaders to sign his visitors’ book.

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