ITALY:EMBATTLED ITALIAN prime minister Silvio Berlusconi last night defiantly defended the creditworthiness of the Italian economy, arguing that recent market turbulence simply did not acknowledge the country's "financial and economic solidity".
Addressing parliament after two days of renewed attacks on the Italian economy, which have seen the spread between Italian and German government bonds reach an all time high, Mr Berlusconi argued that market analysts have not taken “due account of the solidity of the Italian system and of our points of strength”.
Keen to downplay speculation about tensions within his centre-right government, Mr Berlusconi delivered his lower house speech, flanked by Mr Tremonti and by foreign minister Franco Frattini.
On at least one occasion, the prime minister deferentially acknowledged the contribution of Mr Tremonti, turning to him to express his approval.
Mr Berlusconi had delayed the timing of his speech until after European stock markets were closed, prompting speculation that he had done so in order to avoid any further market turbulence that might be generated by his speech.
Given that Mr Berlusconi has remained almost silent over the last month of market unrest, analysts and international observers were listening closely last night. It may well be that when the markets open this morning, some of those analysts will choose to differ fundamentally with the prime minister’s bold defence.
In brief, he suggested that the analysts were mistaken and that Italy was doing a lot better “than other countries in the euro zone”.
“Our country has a solid and competent political system which, with the help of the opposition, has just approved an €80 billion austerity plan.
“The markets simply do not rate our creditworthiness correctly. They don’t take due account of the solidity of the Italian system and of our points of strength . . .”
Mr Berlusconi claimed “the EU and all the international observers” had expressed a positive opinion of the austerity package presented three weeks ago.
In what was a very sober Berlusconi performance, the only polemical moment of his speech came when, departing from his script, the prime minister reminded the house that he himself is a business impresario who confronts market realities on a daily basis, saying:
“I have three companies quoted on the stock market. I am myself in the trenches of this financial war, totally aware of what is happening on the markets”.
Opposition leader, Democratic Party secretary Pier Luigi Bersani, confirmed precisely that criticism within minutes of the speech, saying: “Either I’m living on Mars or he is . . .”
