Sunday, July 31, 2005

Silvio's own goals

As you read this post and quickly become aware that it's about the chaotic state of Italian politics, you may find yourself asking "where in God's name is this headed?" but we think we have a plan. Anyway, it's prompted by seeing Silvio Berlusconi in the news a lot this week. Of course he had to get a little more nervous about the prospect of an al Qaeda attack in Italy when the London Attack 2 suspect just happened to show up in Rome, but there've been other antics as well.

We thought his bizarre tirade against the Euro should have gotten more attention; Silvio is likely just playing politics by hoping to tarnish the unpopular Euro as the project of his opponent Romani Prodi -- the shite European Commission President predecessor of the current shite European Commission President Jose Manuel Barroso. But when Prime Ministers start making noises about currency regime changes, markets get nervous, and Silvio should wonder why it was that one prominent Italian econ-blogger, Nouriel Roubini, decided that his speech merited a comparison of Italy with Argentina.

Sticking to matters financial before we get to the fun stuff (football!), the president of the Italian central bank, Antonio Fazio, has managed to get himself get dragged into a financial scandal. It's a long story but it looks like he helped an upstart local bank get through some pesky paperwork (minor stuff like evaluating their assets) so that they could mount a bid for a bigger local bank that was also being pursued by a Dutch competitor who Fazio wanted to nobble. But while the details are arcane, there are the juicy phone taps (WSJ, subs. req'd). Fazio called the upstart bank chief Mr. Fiorani on his mobile to tell him the news that all was well with his bid:

"Ah, Tonino, I'm moved," says Mr. Fiorani in response, using a nickname for Antonio, Mr. Fazio's first name. He adds that he has "goose bumps," according to the transcripts. "I'd give you a kiss right now, on the forehead, but I can't...I know how much you have suffered, believe me, I've suffered too...."

We know it's hackneyed and unfair to have Godfather scenes in mind when reading this, but we did. Anyway, it does seem like the Italian elite has an idea in their heads that some combination of the Euro and foreign banks explains their problems. But what about the role of the rampant cronyism at the top levels of Italian society? Consider this financial power play (we'll add a free link asap) by Silvio's media operations, one that we suspect could rebound badly in the forthcoming election:

The Mediaset group owned by ... Silvio Berlusconi won the rights to show Italian soccer highlights on free TV with a bid of $74.46 million Saturday. The three-season contract - lasting through June 30, 2008 - signals an end for state broadcaster RAI's "90th Minute" highlight show, which has become a cultural institution over the years. RAI said it only made a symbolic ... EUR100, offer to retain the rights, and instead renewed its contract for the revised Italian Cup with a $31.44 million bid.

Games from Italy's top Serie A league are shown live only on pay TV - either Rupert Murdoch's Sky Italia satellite service or via pay-per-view through Mediaset or La 7, the TV network of telecommunications giant Telecom Italia.

With no live games on free TV, huge numbers of fans turn to the highlights shown on free TV immediately after matches conclude. Those highlights will now be available only on Mediaset. Critics of the bid process cited what they believed to be a conflict of interest between the league and Mediaset. League president Adriano Galliani is also the president of AC Milan, which is also owned by Berlusconi.

Our UK readers will recognise the anguish of football fans when the highlight show gets screwed by the machinations involving pay TV (and indeed the presence of another usual suspect, Murdoch), but the AC Milan factor does stick out as an extremely fishy aspect to this deal. We hope that the club isn't making decisions based on some ill-focused rage from their loss to Liverpool in the Champions League final a couple of months ago. Because Silvio currently has what Bertie Ahern can only dream of -- a perfect synergy between sporting, media, and political pursuits, and it would be a damned shame if he messed it up.

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