Italy

Index

Italy Main Page
Italy Becomes a Unified Peninsula
The Rise and Fall of Mussolini
Italy Moves to Stabilize Its Economy
Berlusconi Proves to Be Resilient and Persistent
Italy Faces Challenges and Berlusconi Faces Charges
Mario Monti Helps to Stabilize Economy

Italy Faces Challenges and Berlusconi Faces Charges

After two consecutive quarters of negative growth, Italy was declared officially in recession in November 2008.

An earthquake of magnitude 6.3 hit central Italy in April 2009. At least 275 people were killed and 28,000 were left homeless. The town of L'Aquila was the epicenter of the earthquake, but as many as 26 towns were affected.

Silvio Berlusconi's coalition lost its majority in August 2010 amid a row with Gianfranco Fini, the leader of the Party of Freedom. Tension between the former allies had been escalating and culminated when Fini and more than 30 deputies broke with the party to form a "party within a party." The split led to a vote of confidence in December 2010, which Berlusconi barely survived.

In January 2011, Italy's Constitutional Court partially lifted Berlusconi's immunity. The ruling reactivated three trials against him, including one in which David Mills, his former tax lawyer, was convicted of taking a bribe in exchange for false testimony. In February 2011, prosecutors in Milan filed criminal charges against Berlusconi. The charges were for prostitution and abuse of office. Prosecutors say that Berlusconi paid Karima el-Mahroug for sex before she turned 18. Mahroug, a nightclub dancer nicknamed Ruby Heart-Stealer, claims that she did not have sex with the prime minister. She does say that he paid her 7,000 Euros when she attended a party at his villa for the first time in the spring of 2010. Berlusconi vowed to continue governing and to fight the charges. On Feb. 13, 2011, thousands of protestors poured into the streets in Italian cities as well as other cities worldwide to demonstrate against Berlusconi's treatment of women, his latest sex scandal, and his habit of putting television showgirls in political office.

In May 2011, the Berlusconi-backed incumbent candidate for mayor of Milan, Letizia Moratti, was defeated. Berlusconi had said he considered the election a test of his standing and popularity in his hometown. He has a history of becoming personally involved in local elections and the loss of a candidate he publicly campaigned for was a clear sign of his fading influence. Giuliano Pisapia, a center-left candidate, beat Ms. Moratti by more than six points.

Italy's economic woes continued into 2011. In July, the country's borrowing costs rose to 5.7%, its highest rate in more than a decade. Despite implementing an aggressive deficit-reduction plan, by summer 2011 Italy was spending 16% of its budget on interest payments, and foreigners held about 800 billion euros ($1.4 trillion) of Italy's debt, a sum greater than that of Greece, Ireland, and Portugal combined. Compounding the problem was years of sluggish growth, which has impeded Italy's ability to reduce its debt.