[ccebook.cn]The World in 2010

Christian and Centre Democrats. Regional elections expected in March will be an
important test.
Copyright © 2009 The Economist Newspaper and The Economist Group. All rights reserved.
media tycoon’s
demise
Italy will recover from the recession. But what remains uncertain—and politically significant—is how quickly.
Mr Berlusconi and his finance minister, Giulio Tremonti, tackled the crisis with a show of unshakeable
optimism. There were two reasons for this. With global trade slumping, Italy, highly dependent on selling
abroad, could not count on exports to get it out of trouble. So maintaining internal demand was vital. The
other reason was that the government just could not afford a costly stimulus package: Italy’s public debt was
bigger than its annual GDP. By minimising the challenge, Mr Berlusconi successfully dampened public
expectations of action to tackle it. His claim that Italy would suffer less than other economies proved hollow:
in the 12 months to end-June 2009, Italy’s GDP fell by more than that of any other G7 member state except
Japan.
Weak growth in 2010 could bear out the fear of Italy’s retail association, that by 2011 the country’s GDP at
constant prices might be little greater than ten years earlier, when Mr Berlusconi returned to power, irate that
The Economist had branded him “Unfit to lead Italy”.
John Hooper: Italy correspondent, The Economist
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