Berlusconi Conviction And The Effects It Can Have On Italian Politics

Although Italy’s Silvio Berlusconi is still safe in public office while a review of what would effectively be political exile takes place, his conviction for tax fraud is an “extremely destabilizing development” with significant implications for Italy’s fragile coalition government, analysts said.

“An already conflict-ridden Italian political scene has just become even more divisive following [the]ruling…The strains on prime minister Enrico Letta’s fragile coalition government are growing with each passing day,” Nicholas Spiro, head of Spiro Sovereign Strategy, told CNBC.

“For Berlusconi’s People of Freedom party (PdL), the ruling is a potential deal-breaker which, even if it doesn’t lead to the fall of the government, makes any cooperation with Mr Letta’s Democratic party (PD) all but impossible,” he added.

On Thursday, Italy’s highest court upheld a jail sentence against Berlusconi for tax fraud involving his Mediaset company. The sentence was commuted from four years to one year under an amnesty, but the judges ordered a judicial review of a five- year ban from public office that Berlusconi was handed.

This will enable him to remain as a senator and as leader of his center-right People of Freedom Party (PDL) for the time being. For his part, Berlusconi remained defiant on Friday, saying on one of his TV channels that he had been “persecuted.”

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza