Italian Prime Minister Silvio Berlusconi may be the latest domino to fall in the toppling of governments that has followed the spread of the euro zone financial crisis that has already claimed Greek Prime Minister George Papandreou’s government. In exchange for his resignation, Berlusconi wants the Italian parliament to pass the austerity measures requested by Italy’s euro zone partners. In a meeting with Italian President Giorgio Napolitano following the failure of key legislation in the lower house, Berlusconi conceded that his government was no longer capable of passing legislation and offered his resignation on the condition that he could get the austerity guarantees.

President Giorgio Napolitano could form a new government from the existing coalition to pass the austerity measures or he could be forced by the opposition to call for new elections. Though some see Berlusconi’s maneuver as a political masterstroke, hinging his bets on the passage of austerity measures which have not yet been fully detailed, many within his own party concede that the Italian Prime Minister is increasingly a liability rather than as an asset as Italy moves forward. Italy’s borrowing costs have gradually increased as the irresolution of the Greek crisis has continued to worry investors in European sovereign debt. The need for effective governance in Italy is now of paramount importance as Italy’s economy is of many magnitudes larger than Greece’s and thus would have a much more deleterious effect on confidence in the wider eurozone.

Though Italy’s economy is much stronger than that of Greece, its debt ratio is the highest in the euro bloc of countries and, with increasing investor unease, Italy’s access to credit markets could be severely hampered if reforms are not pushed through soon. The New York Times had this quote from Italian political commentator Massimo Franco for the newspaper Corriere della Sera to sum up Berlusconi’s approach to governance: “This agony is long because it’s not the end of a government but the end of a system and because the person in question is someone who doesn’t have a sense of the state, a person who subordinates everything to his own personal survival.” It has become increasingly evident that Berlusconi does not have a care in the world for the opinions of his party members, society at large or even that of the rest of the euro zone member states. He is a boorish and polarizing figure, the consummate politician but also a survivor and a fighter. Though some would think Berlusconi’s offer of a resignation would be the closing curtain on his drama, it could instead just be the beginning of a new act in the already tumultuous reign of one of Europe’s most controversial leaders.

[New York Times]