The End of Berlusconi and the Future of Italy
For nearly two decades Prime Minister Silvio Berlusconi inspired voters with his enthusiasm, but he brought no reform to Italy. Now his likely successor and the European Central Bank are setting out with a host of reforms, but have no enthusiasm to get them passed.
GIANNI RIOTTA is a columnist for La Stampa and teaches new media at Princeton University. He is the author, most recently, of The Things I Learned (Le Cose Che Ho Imparato).
To outsiders, Italian Prime Minister Silvio Berlusconi may appear to be an Italian extravagance. But behind the political and sexual scandals hides a history of moral malaise.

Italian Prime Minister Silvio Berlusconi is on the way out, the story goes. Come Monday, his center-right coalition, which has dominated Italian politics for nearly 20 years, will be a thing of the past, and Italy will be spared the wrath of the European debt crisis. The opposition thinks it is time to uncork the prosecco.
But it is not. Italy is far from fixed.
Berlusconi first walked the magnificent halls of the Palazzo Chigi -- the palatial prime minister's residence -- in 1994, when he was a media tycoon, football entrepreneur, a bon vivant, a billionaire, and all of a sudden founder of a political party, Forza Italia. Sophisticated analysts spurned the new party, but for two decades Forza Italia locked in the support of at least a third of the Italian electorate. It won three national elections. And over the years, Berlusconi lined up tens of thousands of political operatives to run the country's major regions and cities, from Lombardy to Sicily and from Milan to Rome.
Voters were captivated by Berlusconi's anti-establishment war cry: "I am a self-made man, not a politician!" They loved his unbridled optimism, his populist style. However, although the prime minister railed against the status quo in his speeches, he failed to reform Italy's stilted economy. He never touched the fat cats -- the tax dodgers, the clubby entrepreneurs who spurned innovation, the class of lobbyists always tied up in shady deals -- or the way they divided public money and assets with little regard for merit and productivity, but instead according to their old web of family and friends. He frequently clashed with the country's powerful unions but never managed to energize the country's sluggish labor market...
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Italy's entry into Europe's single currency was a triumph of fiscal displine over a long history of profligate spending. But Italy's embrace of European institutions is driven by more than just economics. "Europe" has helped Italy cement its national identity, clean up its politics, and modernize its laws. Although the European Union will never replace Italians' regional or national allegiances, it will always find its staunchest supporters in Rome rather than in Paris, Brussels, or Berlin.
Two years, three sovereign bailouts, more than a trillion euros in cheap ECB loans, and dozens of summits later, the latest developments in Germany suggest that Berlin is moving to solve the continent's crisis. But the country’s idea of a solution remains a system in which Berlin gets de facto and de jure veto power over national budgets in return for eurobonds. That misses the point: the crisis is not fiscal, but financial. It began, and it will end, with the banks.
As Europe emerges from economic crisis, a larger challenge remains: finally turning the eurozone into an optimal currency area, with economies similar enough to sustain a single monetary policy. Getting there will be difficult and expensive, but the future of European integration hangs in the balance.
