Italian politics. Legislation, Italian-style

Date: 03/12/05

Nice place for a strike

How Silvio Berlusconi's government speeds bad laws and delays good ones

THE Italian Senate has just passed a legal-reform bill that few outside the prime minister's own circle actually want. Yet five days earlier, the cabinet delayed - and may have doomed - urgently needed pension reforms. Both decisions reflected Mr Berlusconi's own interests. No wonder Italians have just staged their sixth general strike under this government.

The legal-reform bill doubles the penalties for Mafia offences, which is fine; halts the suspension of sentences for repeat offenders, which is more arguable; and eases the threat of jail for rich defendants in white-collar cases, which is deplorable. It cuts the statute of limitations (after which a crime is automatically expunged) for corruption, fraud and false accounting. By the time the tortuous judicial system produces a verdict, many defendants may go free.

Thousands of trials, now and in future, will become pointless. Among likely beneficiaries are Mr Berlusconi, who faces yet another trial, on charges of embezzlement, fraud and false accounting at his Mediaset firm. Others may include those on trial for the Parmalat corporate-fraud scandal. Yet opposition critics argue that the bill's real purpose was to save Mr Berlusconi's former lawyer, Cesare Previti, from jail. Mr Previti is appealing against two convictions for corruption. The criticism proved so embarrassing that the government's supporters removed the "Salva Previti" clause from the bill. But Mr Previti will still benefit from another provision that precludes jail for most over-70s.

The days are ticking away to the dissolution of this legislature before an election next April. Yet Mr Berlusconi's government is wasting parliament's time in measures that benefit him or his allies. Many hours have been devoted to a constitutional reform favoured by the Northern League that is not expected to survive the referendum demanded by law. Italy's electoral system is also being changed, in a bid to improve the right's prospects. And Mr Berlusconi is threatening to alter the rules on political advertising to allow him to bring his money to bear on the outcome. Meanwhile, desperately needed structural-reform measures, including one to improve corporate governance, are languishing. If the pension reform is delayed too, the government's sole completed reform will be an overhaul of the labour market that was largely inherited from its predecessor.

The pension reform was the second part in a two-stage project. Italy spends a massive 14% of GDP on pensions. Last year, parliament raised the minimum age for state pensions from 57 to 60, but only from 2008. A decree was planned to speed up other changes. It aimed to cut the state's eventual liabilities by freeing for long-term investment the 7% or so of wages that Italian employees contribute towards their severance-pay funds. As much as euro14 billion ($16 billion) could flow into independent pension funds, providing a bonanza for asset managers. But insurance companies feel they should do better still, and want changes to the decree. A leading insurer is Mediolanum, 35% owned by Fininvest, the company at the apex of Mr Berlusconi's empire.

Last week, the cabinet came close to sinking the whole bill, but instead opted to delay its introduction by two years, until 2008. The prime minister did not take part on either occasion; three ministers from his party abstained in the final vote. But the insurance industry's friends in government make no secret that they will use the two-year delay to reopen the decree.

How Silvio Berlusconi's government speeds bad law and delays good ones.